Use bridging loans to increase the market value of your home

Thursday, 08 September 2011 04:31

A bridging loan can fund property renovation

A bridging loan can fund property renovation

For an effective way of raising funds with which to pay for property renovation, a bridging loan could prove an ideal solution.

Whether it's relatively minor work that you have in mind or you're looking to carry out major structural alterations, home improvements can not only make your house or flat more pleasant to live in, but as it could significantly increase its market value getting a loan for this purpose may prove to be a worthwhile investment.

But in what instances can a bridging finance deal be most suitable to use to fund property improvements work?

Of course, you may be first inclined to seek out a loan from a traditional lender, be it secured against your home or otherwise. However, the recent financial climate has seen many banks, building societies and other financial services providers tighten up their lending criteria. As such, you may find these companies are often unwilling or unable to provide you with the cash you seek, especially if you have had problems in the past keeping on top of your monetary commitments.

But that isn't to say you won't be able to get the money you need with which to improve your property (and in turn increase its value). It may be a good idea to find out all about bridging loans, as provided that you are not presently bankrupt you should be able to successfully apply for this kind of credit, regardless of your circumstances.

Alternatively, if you have already started work on a property renovation project but have run out of funding, getting a bridging loan can provide you with the money needed to ensure that work can continue. Given they can be applied for and taken out at fairly short notice, such finance means that the project should not be delayed for too long while you attempt to arrange additional funding.

Taking out a bridging loan means that you can pay builders and other professional tradesmen to work on your property promptly. However, if you'd prefer to do work on your home yourself, then the loan can be used to pay for materials.

You should find that the money generated from a bridging loan can be used to renovate all parts of your home, from having cavity wall insulation fitted to extending the overall amount of space you have through the addition of a conservatory.

However, two rooms that you may be particularly inclined to improve are the kitchen and bathroom. Estate agents and prospective buyers alike tend to place most value on these parts of the home, so by using a bridging loan to increase the amount of space or to pay for new fixtures and fittings, you could find that the value of your house is raised significantly.

Should you be looking to carry out improvements to your property with the specific intention of maximising its value and commanding a higher price when placing it on the market, taking out a bridging loan in order to fund such work could in time provide a substantial return on your investment.

Of course, if you have any questions make sure that you seek out advice on bridging loans. That way you can be certain that this type of finance deal will enable you to get the funds needed to carry out property development work and increase the value of your home.



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    Raising the money you need to start a business can be hard, however, there are alternatives to bank loans. Among them are bridging loans, peer-to-peer lending and borrowing money from friends and family, meaning you need to do plenty of research.

  • Important questions to ask bridging loan companies

    Before taking out a bridging loan, you must understand a number of key points. These include the rate of interest you will be charged, the length of time you have to repay the loan and whether there are any arrangement fees that apply.

  • Why bridging loans are only suitable for short-term funding

    You should only consider bridging finance if your funding needs are temporary. This is because the high rates of interest make bridging finance unsuitable as a long-term solution, so if you have long-term needs, you should look at other options.

  • Banks vs. specialist lenders – which bridging loans are best?

    Both banks and specialist bridging loan companies can provide the bridging finance you need, meaning you need to compare products from a range of providers. You need to look at factors such as interest rates and arrangement fees.

  • Can bridging loans work for those who only need small amounts?

    Some bridging loan companies will lend up to £5 million if you have sufficient equity in your home, however, what if your borrowing needs are more modest? If you need a sum of £10,000, bridging loans can still be an option.

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