Best Bridging loans for Your Real Estate Property

The real estate market is on boom, consequently demands of people seeking loan too is increasing. New properties are launched everyday by builders thus anticipating the buyers to move to better. However it is not always that you have the sufficient capital to buy for the property.

The best option is to go for loans; mortgage or bridging finance will suit best for the real estate needs. Apart from this you should also use mortgage calculators to calculate the money you need to buy and the repayment installments.

After you have decided all try consulting mortgage agents and broker who would give you a better insight of the second charge bridging loan. In this article we will discuss out some of the popular home loans available in the financial sector.

Variable home loans: As the name suggest these loans carry variable interest rate. The amount may change according to the moving rates. These loans are for all those who are planning to pay off the amount over the full period of the loan. Don’t prefer these loans if you are planning to pay the mortgage quickly.

Advantages

The Repayments fall because of the falling interest rate thus offering you a profitable deal
Offer facilities to add payments and redraw facility for the customer
If you are concerned buyers you can pay in advance without attracting any penalty

Note: Higher interest rate may force you to pay higher so avoid paying when official interest rates are higher.

Fixed Rate home loans: The rates of these loans are fixed and therefore these carry fixed loan repayment. The time period varies but the borrowers have flexibility to lock in repayments for a fixed period of time, say it 2-7 years. The second charge loans are generally extended for long term (about 20-25 years) After every fix loan period (2-5 years) you can decide whether continue with the fixed rate home loans or want to switch to variable loans.

Advantages

Repayments do not fluctuate on the basis of official interest rate
Sure to give you a peace of mind

Note: The second charge bridging loans may be little bit risky in economies where interest rate keep falling and if you pay early you may be penalize.

Split Rate Home loan: The bridging loans for home are split, i.e. half of the loan repayment option is based on fixed and the other half is variable.
Advantages: The borrower enjoys both the situation. He/she enjoys the flexibility to make additional payment in variable phase of the second charge loan. You can easily calculate the estimates

Note: the repayment may fluctuate causing you monetary loss.

Interest Only home loans: These loans suits best who wants to add value to their property. The borrower only needs to pay the interest making repayment lower.

Note: there can be instant increase in the repayment at the end so plan carefully.

People need to use bridging loan very judiciously. It should be used to enhance the financial condition not to deteriorate it further. Be disciplined in paying the promised installment and you will find your credit history not only booming but will find lenders sending you request to take loans without any collateral.