Refinance Bridging Loans
Refinance bridging loans are an invaluable tool in circumstances where a loan has run its full repayment term but you are unable to pay it off. Failure to repay the loan would mean losing the property you used to secure the loan. In simple terms, a refinance bridging loan replaces an existing loan with a new one, giving you time to put repayment funds in place.
Refinancing an existing bridging loan can also be a viable way to release equity from a property you own for onward investment in another property. The released equity can also be used to fund business expansion, meet short term cash flow challenges and, for residential customers, to pay for property renovations.
Ideally you should look to refinance an existing loan if lending rates are lower than those on your existing loan. But if you have recently run into financial difficulties and aren’t in the best shape to service your loans or have a pressing need for funding, you may neither have the credit nor the time to organize cheaper finance. If you have poor credit, you will also struggle to get approved for a regular bank loan even if time was on your side.
When Does A Refinance Bridging Loan Make Sense?
A refinance bridging loan is, admittedly, not how the average business or person would look to raise finance as it may impact your finances in negative ways. But there are circumstances where this short term financing solution is your only option.
In the majority of cases, borrowers will have a need for quick cash but with the complication that the only property they can use to secure the loan is tied up in another loan. The option that remains is to refinance the old loan under new terms. If you are rebridging with the purpose of releasing finance for a property renovation project, it may be that the renovation will take longer than the term of the original bridge loan. This may be because of unexpected delays encountered by the contractor.
Another scenario where a refinancing bridging loan may be called for is where there are new, previously unbudgeted costs for the project you had originally borrowed for. To ensure the project doesn’t stall, it will make sense to negotiate a refinancing solution.
Similarly, you may have obtained the original bridging loan in anticipation of getting approved for a longer term mortgage but have struggled to get approved. The implication is that your whole exit strategy for the original bridging loan can no longer hold and there is a risk you will fail to pay off the loan. A refinance bridging loan will give you more time to secure longer term financing.
For a property developer, circumstances may be that unexpected costs and delays with construction or renovation mean you cannot complete and sell the property in time to use the proceeds to pay off the original bridging loan. Again, the only option will be to refinance the bridging loan with a new term that will hopefully give you enough time to complete and sell the property.
Contact Us Refinance Your Existing Bridging Loan
There is no reason why you should default on a Galaxy Finance bridging loan when there are refinancing options in place. Come and let’s have a discussion on how we can help you make good on your loan obligations without putting your investments and credit in jeopardy. Contact us today.
At Galaxy Finance, nothing matters more than the customer. The client is central to everything we do. It is quite an easy claim to make, of course. But given the fierce competition we are up against, there is no other way to succeed than focusing our energies towards meeting clients’ needs. Without a deliberate customer focus, the client will simply move on.
As the world gets more connected, we have to innovate ways of serving customers better, wherever they may be. For us, advances in technology allow us to improve current products to adapt them to clients’ evolving needs. We are continually researching ways to use technology to develop products that allow us to serve clients faster and conveniently.
We are motivated to use our lending platform to remove old prejudices around gender, race, and ethnicity and make bridging finance available to previously marginalised sections of our population. We live in an era where business has to be driven by a purpose that transcends profit. As such, we are determined to be as inclusive as we can across all areas of our business.