Second Charge Bridging Loan
What is Second Charge Bridging Finance?
A second charge bridging loan is a type of loan that is used to cover the financial gap until the borrower receives their next salary. This type of loan is usually obtained from a bank or other financial institution.
A second charge bridging loan is a type of loan that will be secured on your property.This type of loan is usually used when you are in urgent need of cash and your current mortgage provider will not provide you with a short-term loan. A second charge bridging loan is also sometimes referred to as an “overdraft” or “second charge” mortgage.
The most common one is for home improvements or repairs. It can also be used to buy another property, invest in stocks, and purchase a car.
It is an option for people who are struggling with their mortgage repayments and need some time to save up the necessary funds.
This type of loan will enable them to pay off their current mortgage and then they can use the equity within their home as collateral for the second charge bridging loan. This means that they will be able to keep their home, even if they cannot afford it at present.
Who is eligible to avail second charge bridging loan ?
Eligibility criteria for a second charge bridging loans are:
- The borrower needs to have an existing mortgage or secured borrowing in place with the lender
- The borrower should be in need of short term funds
- The borrower should be able to repay the debt within 2 years
- The borrower should not have any major defaults on their credit report
- The borrower should have a property that he or she can sell
- The borrower should be able to provide evidence of the value of the property
- The borrower should be able to provide evidence of their income
- The borrower should not be in bankruptcy or insolvency proceedings.
Is there any extra requirements to avail second charge bridging loan?
The answer is yes, there are some extra requirements that you need to fulfil in order to avail a second charge bridging loan. For example, the borrower needs to have a good credit history and should be able to provide sufficient collateral.
This type of loan is usually offered by banks and the process of applying for it can be done online. The borrower has to provide their personal details and the property details which they want to use as collateral. They also need to provide some documents such as bank statements, proof of income, proof of employment etc.
The amount available for this type of loan is usually up to 50% more than what you borrowed for your first mortgage so it can be used as a buffer if you get into financial difficulties in the future.
Extra Requirements:
- Lenders will usually require you to have enough funds in your account to cover the cost of your new property and other associated costs such as stamp duty, solicitor’s fees, etc.
- You may need to provide proof of income, or show that you have an offer on another property
- You may need to provide proof of savings or assets
