Bridging Finance v Mortgages
Bridging loans and mortgages are two of the most fundamental financing options for property purchases in the UK. If you have queries regarding the upsides and downsides of bridging finance v mortgages, we at Bridging Funding can come to your aid. We are a decorated financial services provider with several decades of experience under our belt.
What are the Differences Between Bridging Finance and Mortgages?
- Term length – Bridging loans are generally available for shorter durations (1 month to 1 year). Mortgages are more long term in nature, and usually, have terms with a minimum of 5 years.
- Flexibility – Bridge loans in the UK offer flexible terms and ensure better financial freedom for the borrower. This kind of flexibility is mostly absent from mortgage plans, and the terms are quite strict.
- Land as security – If you are taking a bridge loan, having your land as a security is a practically viable option. Mortgages can be obtained only against residential property and not land.
- Monthly payments – There is no need to make any sort of monthly payments in case of bridging loans. Mortgage providers have stricter standards to ascertain that a borrower can afford the loan, and payment needs to be made on a periodic basis.
- The time taken – A bridge-type loan taken against residential, commercial, semi-commercial property or land can be processed and approved within a few days or a week. Mortgage application and approval can take many weeks.