Mortgage Glossary: Bridging Loan

Bridging Loan

This is a short term loan. It is often used by purchasers of a property who need funds for a limited period of time. e.g. until they sell their existing home. Major banks and building societies can offer bridging finance, but consider all the risks before you opt for it. For example, if you effectively take on a second home loan and you fail to sell your first property, can you afford to shoulder the burden ? If you do opt for bridging finance, are the interest rate terms reasonable and what is the annual percentage rate (APR) being asked ?

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See also: Financial Services, Mortgages