What Is A Bridging Loan And How Can I Utilize It Wisely?
Are you using bridging loan to catch up on overdue bills and increase security of income? Or, are you taking it to purchase another home while your existing home is for sale?
If you know “what is a bridging loan”, then you understand why many borrowers choose it not only to finance their emergent needs and buy a new property but to invest into an income-generating project.
Bridging loan is a type of loan that supplies the borrower with a certain amount of cash, payable within 1 to 12 months. It literally serves as a bridge for a person to get to a certain level of financial stability, while waiting for a bigger source of fund.
One must understand the value of using bridging loans and other types of short-term loans to support income security, in order to utilize such source of funds wisely. But, here are some rules to live by, every time you get a loan:
First, using the proceeds of a loan to increase wealth is better than taking out such loan to support daily necessities.
If you have been laid off or you have a job that offers insufficient income, you can use the proceeds of your loan to reinvent yourself. Embark on a new business venture that will not only help you pay your bills and living expenses but provide you with a steady source of income.
Second, if you want to delay the liquidation of your equity use short-term loan instead of bridging loans.
A bridging loan is one of the most attractive sources of additional cash for homeowners while waiting for their house to be sold. While other bridging loan lenders are strict in terms of spending the loan proceeds, bridging loan alternatives such as short-term loans are lenient on its use.
Short-term loan borrowers use it to finance their children’s education. It is also a good source of cash during retirement. Many borrowers opt for short-term loan not only in paying down a new house but also to pay for roof replacement, home renovation or remodeling, and credit card payment
As the home prices continuously increase, tapping into bridging loan while waiting for the sale of an existing home seems to be a practical move, especially if you’re hard on cash. But, if you need a huge sum of money all at once for a definite project, why not use the short-term loans instead? This way, you can continuously build your equity until your existing house is finally sold.
Third, you can incorporate short-term loans in your retirement plan.
Retirees are known for their resourcefulness. They know that they can benefit from additional financial support those short-term loans–a better alternative than bridging loans offer. When medical emergencies happen short-term loans can be very useful.
Aside from supplemental income during retirement, short-term loans can also be used to boost anyone’s retirement’s nest egg.
Soon-to-be retirees can spend the short-term loan to build their home equity, increase their share on different investments and put more money to their retirement plan. Using short-term loans delay their need of collecting distributions from their various investments.
If you want to learn more about what is a bridging loan, or if short-term loan is better than bridging loan, call 1300 137 778. You can also contact NSW Mortgage Corp to access fast-approval short-term loans (a better option than bridging loans) with easy-qualification, and get the most competitive loan rates today!