Can a bridging loan be used to prevent property repossession?

Can a bridging loan be used to prevent property repossession?
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    Are you facing the prospect of your home being repossessed? Has an unexpected major expense disrupted your finances and thrown you into a financial crisis, making it difficult to keep up with your mortgage payments?

    If so, bridging finance could help prevent repossession and give you the breathing room to get back on track while you get help to look at your options.

    Bridging loans can provide a quick and efficient way of preventing property repossession by allowing you to borrow money against an asset to cover any short-term gaps in finance. Once another form of finance has been obtained, or an asset such as a house is sold, the bridging loan can be paid off.

    How does repossessing a property work?

    Firstly, the mortgage lender will look to work with you to try and find an amicable repayment plan to get things back on track. Repossessing a home and issuing repossession proceedings is often the last thing they want to do.

    If you are unable or unwilling to come to an arrangement or if you are unable to complete the payment plan, the lender will look to start the process of legal action to repossess.

    There is a process to follow, and they will provide you with a list of outstanding repayments, the arrears, and the balance of the outstanding mortgage. Failure to do this can find the lender in default under the rules that are regulated by the financial conduct authority.

    Have your mortgage arrears, and the lender is seeking to repossess?

    Bridging loans are a type of short-term loan designed to bridge the gap between a current financial commitment and another property transaction. This could be a property that needs to be sold with the pressure of a mortgage or loan that needs to be repaid quickly.

    A bridging loan can help if your mortgage arrears have reached such a point where the lender has requested full repayment with the ultimatum of legal action and/or repossession.

    The bridging finance would be secured against one or more assets you own, usually your home or another. This would allow you to repay the current financial pressure while other options are investigated and completed.

    How can a bridging loan prevent repossession?

    To stop a repossession order, bridging loans can provide the funds you need to pay off your mortgage completely and stop house possession. This could be enough to stop the repossession process and provide you with the time and resources needed to look at alternative options.

    The amount of money available to you through a bridging loan can vary, depending on the value of any assets used as collateral. It’s important to consider carefully how much money you need and don’t borrow more than you can afford to repay at a later date via your exit strategy.

    How much bridging finance can I borrow?

    The amount of bridging finance you can borrow will depend on the value and type of assets used as collateral. If you own a property and there is enough equity, your lender may be willing to lend up to 75% of its estimated market value, depending on their criteria.

    However, some lenders may limit how much they are willing to lend, so it is worth shopping around to find the best deal and interest rates.

    Are bridging loans the best option for you?

    If you are facing the prospect of a potential repossession, maybe through a repossession order, then refinance via bridging finance could be a possible solution. It can provide the funds needed to settle the existing loan and stop repossession from taking place.

    However, it is important to understand that a bridging loan is intended for short-term use only and must be repaid within an agreed time frame, often 12 months. This would usually allow enough time for the mortgage to be refinanced or for the property to be sold.

    Also, remember that a bridging loan is a secured loan, and any assets used as collateral could be at risk if you fail to meet your repayment obligations.

    Therefore, it is essential to weigh the risks carefully before committing to a repossession bridging loan and make sure you can afford the repayments and have a suitable exit strategy in place.

    Avoid repossession with One Commercial today!

    If you’re facing repossession and need to review your financial situation and circumstances fast, One Commercial Loans can provide the help that you require. We work with a number of selected mortgage and commercial specialists with experience of helping with this very situation.

    Contact us today to learn how we can help and assist you in finding some refinancing options. Our friendly team of experts is on hand to answer your questions and provide tailored advice to help you make the right decision.

    Don’t let repossession take away your home when there are other options available – get in touch with us today!

    Frequently asked questions about repossession bridging loans

    Repossession bridging loans are a great option for those looking to access short-term capital quickly. Check out our FAQs here:

    Mark Piper
    Mark Piper

    Mark is the senior advisor at One Commercial Loans and has a wealth of experience in bridging and property finance.

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