What is Bridge Financing for a MortgageHow is a bridge loan for a mortgage?
Bridging finance - Mortgage advice
Bridge is a short-term credit facility intended to fill a void. This could be because the real estate is in need of refurbishment, it could be to interrupt a supply line (i.e. buy before you buy another real estate), it could be because you have a deadline, e.g. at an Auction. They can bridge a building you already own, either as a first fee (if you don't have an established mortgage) or as a second fee (provided you have enough equity), or they can bridge a building you buy.
Creditors calculate a one-month interest rate. Getting cargo living space is generally cheaper, followed by second cargo living space then BTL is often more. Usually you are charged a appraisal and legal costs (out of consideration for a mortgage, the lawyers are on your regular lawyers for the sale, you are charged for the lender here legal, not your own) and usually a substantial filing commission.
Most importantly, interest rates can be "rolled up", meaning they are added to the credit and payed on withdrawal, so current affordability is often less problematic than with a regular mortgage. However, the most important part of a bridge credit is the exits. Creditors will look very carefully at your intentions and make sure that if the sale of the scheme is to take place, that the numbers and deadlines are reasonable, if you are planning to fund the withdrawal, then this in turn must be doable and something you can show.
The bridge is regarded as a risk because the penalty for non-repayment of the loans at the end of the period is very high and generally quite high. However, it allows you to obtain things that you would not be able to do with a mortgage, and allows you to compete bargain with bargainers with respect to pace and the kind of property that you can earn.
With respect to similar, there are mortgage loans that do not have a prepayment penalty, but their terms will state that they may not be used instead of interim financing, and apparent efforts to do so will be discovered and cases rejected. However, if you want to buy, refurbish and resell a mortgage-backed home within a typically 2 year timeframe, a mortgage without ERC might be more appropriate and certainly less expensive.