Alison Katte's blog: "Alison Katte"

Life is a highly risky venture, and it needs help from a lot of quarter to able to get the right kind of comfort and assurances. There are no guarantees in life, and yet people toil away to make a good living and enjoy life beyond surviving every day. There are different factors that provide for the several needs that drive the people for doing something good with their life. Homes are one of the most important ones. While people have long since moved away from the concept of having homes just for the sake of shelter, they are still the nesting ground for the families.

Financial ability to afford

The most important part of making or buying homesis to be able to afford it. If a person is not able to finance the venture then there is no hope for getting the right home. Many people get stuck with the houses they do not like because they do not havethe adequate funds to make the purchase possible. To borrow would mean that they will have to give security for the loan. Security would mean an asset that they do not have. However, banks have many schemes that help the future owners get the benefit of having their own homes for the first time with their help.

Change of locations

However, in time the house may not serve to fulfill the needs of the whole family,or they may choose to move elsewhere. These times will need a careful calculation of the finances. They will need to determine how much they have, what amount to borrow and whether they wish to sell the house they are currently occupying. Alternatively, they may wish to refurbish their homes and need a loan that they can repay within six months to a year. The main reason for the emergence of the concept of the bridging Finance emerges from this particular concept.

Lender security perspective

To get bridging loans the lender will offer funds in lieu of the extended mortgage on the home and that amount will have to be repaid in full at maturity. The repayment schedule over the time will consider of just the interest, and the rate will be quite higher than the traditional bank rates. What borrowers usually do is that they approach the bank and within the time when the loans come through they start on their ventures with the help of bridging loans. The need gets fulfilled and when the funds come through they repay the loans also without having to pay any charges for advance repayment.

Ability to repay loans

An important component of any bridging finance is the ability of the person to repay the loan. There is no profit for the institution if the person cannot come through with the repayment. Such factors are why they choose to get the security and a higher number of documents signed than what is done by the bank. However, unlike banks they also have a speedier processing time which makes dreams come true that much faster. The demand for the bridge finance has increased to a great extent in the modern context.

Author: Alison Katte