Bridging Loans For Pensioners
A short-term loan gives time to consider options at a turning point in many people’s lives.
Bridging loans can ease the stress of transitional periods of life, working to secure funds to “bridge the gap”, resolving the impossible task of straddling payments. Unfortunately, this is a situation that pensioners may find themselves in without a short-term loan of this nature.
Typically, a bridging loan is repaid over a short-term (12 month) period with the proceeds acquired from selling the property the loan was set against.
How can a bridging loan help?
Bridging loans offer a wide range of solutions to several problems regarding financing property. For pensioners, there are several scenarios where they can be particularly helpful.
• Downsizing in retirement – when you have found the ideal property, a bridge loan allows you to snap that property up with enough time to sell your current larger house. You can also use the bridge loan money to do any alterations necessary, potentially increasing the value of your current home before selling. A Bridging loan allows breathing space to do all this and peace of mind.
• Fixing a chain break – giving your current property the appropriate time to garner attention is essential to lock in a sale. Often, parties involved can be slow to move or, worse still, pull out of a transaction. A bridging loan will fix temporary chain breaks by allowing your property more time on the market to find the right buyer.
• Paying for Care Home fees – the choice, or necessity, to move into a care home can be a troubling notion. That is before considering the exorbitant monthly costs. Families will often have to share the brunt of financial difficulties, yet not be able to afford care home fees without the sale of their parent’s property. A bridging loan gives families the necessary funds to secure their elderly relatives when arrangements must be made on their behalf.
• Paying assisted living fees – similarly, assisted living can be covered by a bridging loan to help alleviate the strain on family members. Elderly parties may be unable to secure their financial and living circumstances independently, so will need additional care that comes at a cost.
• Paying for private medical costs - If you unexpectedly need to foot the medical bill for a private operation, it can be hard to raise the necessary funds. Remortgaging is a good option, but can take months rather than weeks. When time is of the essence, bridging finance can help you pay the bill while your remortgaging application is processed.
Is it harder to be approved for a bridging loan as a pensioner?
Pensioners have the same chance as anyone else of being approved for bridging finance. If you own your home outright, you might even be at an advantage, as you'll have more equity in your house, which helps you repay your debt more quickly as the cash is already there.
Bridging loans are approved on a case-by-case basis and secured against your assets, so income and credit history are not taken into account by lenders.
Speak to one of our bridging finance experts today to see how we can help you secure the short-term finance you need.
A clear strategy is needed for repayment…
It is much the case when securing a bridging loan for any reason, not just those associated with elderly people. However, in this case, there may be multiple parties involved in repayment if an elderly relative needs to go into care.
It is important to consider these circumstances to avoid oversight when it comes to repayment – borrowers must have a clear exit strategy in place, with some foresight given to ongoing changes in their elderly relatives’ condition or general needs.
