While bridging loans serve as a short-term financing solution, it's essential to consider other alternatives and loan options.
Here are a few options worth exploring:
1. Remortgage: Consider refinancing your current home to release funds. However, be cautious about long-term implications like changing interest rates or a potential decline in income. Seeking expert advice is recommended. Most importantly remember: failure to make payments on your home may mean your home is repossessed.
2. Buy-to-Let: Switching your existing mortgage to a buy-to-let arrangement if you no longer live in the property allows you to use released equity to purchase a new property. Keep in mind the risks, such as difficulties in finding tenants or managing two mortgages. Consult a professional for guidance.
3. Secured loan: With secured loans, you can borrow larger amounts at lower interest rates compared to bridging loans. But be aware that your property is at risk if repayments are not met, similar to bridging loans.
4. Personal loan: Some lenders offer personal loans up to £50,000 (often limited to £25,000). Personal loans can be a viable alternative for smaller bridging loan amounts. They usually have lower interest rates as repayment occurs annually. Additionally, personal loans do not put your property at risk of repossession.
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The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.