Want to determine bridging loan costs in detail? That is when bridging loans calculator comes into the picture!
As you may probably know, bridging loans come in handy for short-term financing, when you find yourself in need of significant funds or meet a short notice debt.
They are useful for home renovations, buying a new home, buying auction properties and self-build houses.
Generally, they are paid off within 12 months since the annual interest rate is superior to the standard rates.
However, bridging loans comes with lots of factors to be taken into consideration before you apply for them. Essentially, you need to determine whether this type of finance is ideal for your plans and requirements.
In this regard, a bridging loan calculator can offer you all the details you need to make a wise decision regarding a loan.
First Thing’s First
What is a Bridging Loan Calculator?
All bridging finance lenders have their calculator, and the quotes they offer can vary, sometimes noticeably.
When it comes to determining bridging loan costs, you can take advantage of a bridging loan calculator available online to get a rough notion of how much you could borrow with bridging finance. In other words, you can get an estimation of what a bridging loan might cost you.
The best bridging loan calculator will cover the below aspects:
ü Loan Amount Required: Amount of funds needed to borrow
ü Property Value: Property value to be used as loan security
ü Outstanding Mortgage: It is done if any mortgage you acquire on the subject property or asset is not going to be repaid by the loan.
ü Interest Rate: The bridging loan interest rate is charged on the basis of a monthly interest rate.
ü Lender Arrangement Fee: The fee that the lender charges to arrange the loan.
ü Lender Exit Fee: Some lenders may charge exit fees.
While using bridging loan calculator, make sure to enter as much accurate value as possible.
This, in turn, helps you get realistic output. If you’re wondering what will be covered in results, then the following aspects are generally included:
- Loan to Value (Net Loan): To determine the loan to value (LTV) of your borrowing. Lenders use this factor to determine the amount borrowed as a percentage of the property value. The loan to value is a crucial factor as it will determine the rates available to you.
- Total Interest: The interest amount charged over the loan duration. It is added into the bridging loan and paid when the loan is repaid.
- Total Finance Cost: Determine the total finance cost including the interest, any exit fee, and lender product fee that’s charged. It will help you get a solid understanding of the full cost of getting a bridging loan. Keep in mind that it does not consider any legal fees, admin fees, or the valuation fee that the lender may charge.
In a nutshell, you must look for the best bridging loan calculator in the UK as you will probably want to work out as much information as possible to get the details you need from it. Bridging loans calculator available online is a perfect place to initiate and to get a clue on how you should handle your loan, interest fees, repayments, and more.
Discover more on bridging loans by clicking here