Real estate investors often need short-term loans. This is where quick bridging loans can make a difference. These loans come with a wide variety of benefits for investors. If you are interested to know more about those benefits, read on.
Benefit #1: Buy a Brand New Property with an Existing Property up for Sale
If you have recently put your existing property up for sale, you may feel your finances are inadequate for purchasing a new one. However, with a bridge loan, you can put this worry to bed.
The biggest benefit of a bridge loan in this context is that you don’t need to rent a property. Even if your existing property is on sale and is yet to find potential buyers, you can still take a bridge loan and buy a new property.
Benefit #2: Keep the Profits from Your Old Property Sale Intact
Over the years, several real estate investors have had to contend with parting ways with their profits from existing property sales. Bridge loans can allow you to steer clear of such a situation.
With a bridge loan, you can efficiently clear the necessary down payment on a new property. The best thing is that you can keep the profits from the sale of your old property intact.
Benefit #3: Deferred Payments
This particular benefit of bridge loans varies from lender to lender. However, the lenders that allow deferred payments provide some breathing room to borrowers.
Certain lenders also allow borrowers to pay back only the interest amount until they sell their old properties. All in all, there is a certain degree of flexibility involved for borrowers. However, this is only true for particular lenders.
Benefit #4: Quick Loan Disbursal
When it comes to conventional mortgages, you may have to wait a long time for the funds to come your way. Quite simply, if you are in urgent need of money, you need a type of loan that gives you rapid access to funds.
This is where bridging loans can be substantially more beneficial than conventional mortgages. It would take around 5 days – 2 weeks for the completion of bridge loan disbursal, making these loans convenient.
Benefit #5: Lack of Monthly Repayments
When you urgently need access to a considerable sum of money, monthly repayments would make things difficult for you. This is why mortgages are going out of favor as they are quite strict regarding their repayments. If there are any delays, you are likely to face penalties.
With bridge loans, you don’t need to worry about monthly repayments at all. In terms of debt management, bridge loans are far easier to manage compared to other loan types.
Like any type of loan, bridge loans also carry certain risks. However, as long as you are careful with the money that you receive via a bridge loan, you can expect to steer clear of the risks. So, if you need access to funds quickly and want flexible repayments, bridge loans are the way to go.