Closed Bridging Finance Loans

Closed Bridging Finance

Closed bridging finance is a popular type of loan. It is normally used to buy a new home whilst awaiting completion (after exchange of contracts) of your current residence. The sale normally has a completion date which is when the bridge is repaid in full. Very few sales fall through after exchange so lenders are happy to offer closed bridging finance. There are two main types of bridging finance ‘closed’ and ‘open’. Open bridging is less secure and allows for a bridging loan even though one or more of the security properties is not sold.

Example:

Your property has sold and exchanged contracts but completion will not be taking place until a certain date in the future. At the same time your dream property has also just been put up for sale and has had lots of interest. You don’t believe that you will complete the sale of your current property in time to purchase your dream property. A closed bridging loan can release some of the equity in your current property before it is sold allowing you to purchase your dream property. The bridging loan can then be repaid when you receive the proceeds from the sale.