Bridging loans can be vital for property investors

Fri, 22 Feb 2008

Bridging loans can be a vital financial tool during tough economic times, it has been claimed.

According to Lee Tillcock, editor of Business Moneyfacts, bridging loans can provide a usual source of short-term financing for investors looking to snap up bargain properties .

He explained that the rising number of repossessions will lead to an increase in the amount of properties going to auction and that a bridging loan could prove a useful tool for the successful bidder.

Mr Tillcock said: "Investors buying at auction have often used bridging [loans] because they are required to complete within a few weeks of a successful bid when conventional mortgages are sometimes unworkable.

"Bridging finance is ideal for any situation where funds are required quickly and for short periods."

Figures released by the Council of Mortgage Lenders show that in 27,100 homes were repossessed last year, the highest figure since 1999 and a 21 per cent increase on the number in 2006.
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