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The many variations and parallels of bridging finance and development finance Since the credit crunch many financial institutions have kept tight their finance underwriting which makes it more difficult for people to obtain loans. This has specifically affected people hoping to obtain mortgages as a favorable credit history is once again invaluable and bigger deposits are required. The tight lending limits that are affecting most lenders have resulted in people failing to obtain the loans that they might need. Some individuals have checked out other options for raising finance rather than putting an end to their plans. On many occasions [http://www.kisbridgingloans.co.uk bridging loan deals] have been another option, although it has to be stated not necessarily a smart choice. It's very important that you be aware that bridging loan deals are just meant as a short-term loan facility so because of this needs to be paid back within 6 to 12 months. Bridging loans can be the least expensive choice for raising finance over a short period of time, however they normally have a high month-to-month interest rate leading them to be uneconomic if used as a longer term loan option. Some other features of bridging finance are that they can be arranged promptly as a result of the more flexible underwriting requirements. It is this plus point that makes them commonly used as a method of finance when approaches through alternative channels have failed! On top of being very helpful when cash is required quickly, bridging lenders will make use of a large variety of property as security. This can include derelict property, land and buildings needing renovation. Due to the flexibleness in lending on property requiring work or significant repairs, bridging finance deals in many cases are used as a way to fund building projects. However there are other financial choices than bridging finance that could be taken advantage of for building projects. With many parallels development finance deals are also a useful option for resourcing building, renovation and construction work. The particular advantages that development finance deals have over bridging is that they can be set in place with much longer terms, often up to 3 years, and the money can be released in stages as it is required. This has got the main advantage in that interest isn't actually being incurred on money until it has been used as the project begins and develops. The firms who offer [http://www.kisbridgingloans.co.uk/development-finance/ development finance] are specialists concerning construction projects so can prove to be very helpful and can arrange finance facilities that will be truly beneficial to the project. Concerning bridging loans, as soon as the development is over the house or property will be sold and the revenues used to repay the development finance. Alternatively the completed property can be refinanced to pay back the development loan and made available to the rental sector.
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