Two real estate transactions in progress may be difficult to close on the same dates. Another possibility is that you need to make a buy at an auction but are now short on cash. According to Mortgage Essex, although it is risky, a bridging loan could be helpful here. The purposes, costs, benefits, and downsides of bridging loans are examined.
The Downside of Bridging Loans
- A bridging loan is a short-term loan that requires collateral in the form of an existing asset. If you are unable to pay back the bridging loan, you may lose the collateral.
- Fast, flexible financing comes at a higher interest rate, but it’s worth it for the time and effort saved.
- A variety of fees might be attached to bridging loans Essex, increasing the overall cost.