Bridging Loan
- When a buyer has temporarily insufficient funds to complete a property purchase, he might use a bridging loan to enable completion.
- This is a short term loan pending release of funds from an expected source.
- It may be e.g. that the lender of the main mortgage retains funds pending property repairs.
- I once bought two properties but the lender held a retention i.e. would not release all the funds, until after the two houses were knocked through to create a single dwelling. On the day of completion, armed with a sledge hammer, I knocked a hole through the adjacent properties. I then phoned the lender who sent a surveyor to confirm, before releasing the balance of funds within a few days! Viola.
Published: 21 October 2013 Last Updated: 17 November 2021