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When searching for your dream home, you will often require a large amount of money to ensure a quick purchase.

If, for example, you intend to move to a new house and have found the home you want at a bargain price, but your current home is not selling as fast as you would have liked and you don't have the deposit for the new purchase until the existing home sells. This can put you in a sticky situation, and you are likely to lose the house to another buyer unless you can find the money quickly.

So, what can you do? If friends and family are not an option, the answer is to get a loan. You can try to go to the bank for the loan, but the process may take weeks due to the red tape. Another solution is getting a bridging loan.

Hanan Shapira, director of Property Finance Partners says "bridging loans in the last few years have begun to be more popular for homeowners looking to purchase a new residential property."

What are they and how do they work?

Bridging loans are specialised short term finance, typically acquired for between 3 months to 12 months. One of their advantages is the speed at which an application is processed. One can go from applying for a loan to money in the bank in as little as a week.

To get a bridging loan, you will have to have a property to be put up as security against the loan. You can borrow up to 80% loan to value (LTV) on the equity within your property.

Bridging loans are specialised short term finance, typically acquired for between 3 months to 12 months.

There are many uses of bridging finance such as developments, buying a property at an auction, buying uninhabitable properties or properties that require refurbishment for businesses and for buying residential homes.

How does it work for buying a home?

When you obtain the loan, you can use the money to put down a deposit for the new home, and then once your existing home is sold, you can then repay the loan. This is known as "bridging the gap." It is a common use of bridging loans and works well in the right scenarios.

Regulated vs unregulated bridging loans

If the security offered is your current residence, the loan is automatically a "regulated" bridging loan. That means the loan is regulated by the FCA (Financial Conduct Authority). Regulated loans carry an extra level of protection; consumers are protected under the MCOB(Mortgage Code of Business) rules.

If the bridging loan is obtained against commercial property, it is likely to be unregulated.

Where can I get a bridging loan?

Your first thought may be from the bank, but the majority of high street lenders don't offer bridging loans. The banks discontinued offering bridging loans after the crash in 2007-08, due to stricter regulations on unregulated home loans.

There are specialist lenders who provide bridging loans in the market, made up of hard money lenders and private funds. You will need to approach one of these lenders and package an application to them.

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Costs of bridging loans.

Something to take into consideration is the costs involved in bridging finance. Relevant fees are broken down below:

The bridging loan market is quite a competitive currently in the UK, which has lowered interest fees considerably. It is advisable to find a few lenders and to check what they have to offer.

One way of saving you time and money is to use a broker. A broker can package your application in the right way as well as find you the best deal in the market, as they will have access to many lenders.

Some buyers are having to delay because they just do not have the money saved up.

We are now seeing a growing trend of over 50's looking to buy their first homes. As such, they are also hoping to find specialised over 50's mortgages. Note that such mortgages do exist. Also note that buyers can do some things that can improve their chances of being approved.

Know Your Terms

First and foremost, getting a mortgage when you're over 50 requires that you know your terms. Every kind of loan comes with its terms – defined as the total amount of time you have to repay the loan. The terms are especially important to older borrowers because they may have less time to repay what they borrow.

Let's say you are 55 and looking for a 20-year mortgage. Given that the average life expectancy in the UK is 80 for men and 83 for women, a 20-year deal is doable. Still, it is right on the edge. You would likely find a lot more options if you were willing to take a 10 or 15-year deal instead.

Save a Larger Deposit

Larger deposits make decisions a lot easier for lenders. Imagine seeking a 10-year mortgage with a 50% deposit as opposed to 20%. When the lender looks at the loan-to-value ratio on your application, that 50% deposit is going to look a lot sweeter. It increases the ratio while simultaneously reducing the lender's risk.

If you have been prevented from buying a house because you haven't had a large enough deposit, this suggestion may seem out of place. Do not let it discourage you. Rather, let it be an encouragement to spend the next two or three years saving more. Even if you are already in your mid-50s, delaying your purchase to build a bigger deposit will help you in the long run.

Consider a Shared Ownership Scheme

The government offers a shared ownership scheme through its Help to Buy programme. Under this scheme, you purchase shares in a home rather than buying the home itself. The shares you do not own belong to the scheme, and you pay rent to cover those shares. Once in your home, you can continue purchasing shares up to 75%. Reach that 75% threshold and you'll pay no rent thereafter.

Note that this scheme is only for people 55 and older purchasing a first home. There are income eligibility restrictions as well. You can learn more by contacting the Help to Buy programme.

Work with a Mortgage Broker

The next suggestion is to work with a mortgage broker rather than going directly to banks and building societies. Remember that lenders are naturally afraid of risk. They tend to be nervous of over 50's who might be asking for mortgages they will not live long enough to repay.

A mortgage broker is a better option for several reasons. First of all, mortgage brokers are financial advisers first. It is part of their job to help applicants look through and understand their financial situations before applying for mortgages. Simply put, a mortgage broker helps the client to understand whether or not home ownership is financially viable.

Mortgage brokers also have access to a wider range of mortgage deals. Even if a broker cannot find you a mortgage with a high street bank, there are likely lots of other options through lesser-known banks and private mortgage lenders.

Be Persistent

Finally, be persistent in your search for an over 50 mortgage. They are out there. In fact, over 50's have more mortgage opportunities today than ever before. Lenders are realising the value of lending to older borrowers who just want to get out of the renting game and into their own properties.

Can you get a mortgage if you are over 50? Absolutely. Doing the things you read about in this article should improve your chances of getting a mortgage deal that is right for you.

Giving up "modern day luxuries" for one year could save you over £5,000 towards a deposit for a house, new research from online estate agent Hatched, has found.

With research suggesting that you need, on average, £33,000 for a deposit on a house in the UK, people are increasingly starting to really crunch the numbers, budget and save the pennies wherever possible.

By focussing on eight "modern day luxuries", the team at Hatched have looked at simple savings that could be made to get a bit of extra cash in the piggy bank, helping people get a foot onto the property ladder through some choice (but relatively easy) lifestyle changes.

The eight "luxuries" include: morning coffee fix; weekly treat meal out; a gym membership; body "maintenance" treatments; summer holiday abroad; nights out on the town with friends; a smartphone contract; and monthly cinema trips.

If you can abstain from all eight examples of these "luxuries" at once, you would save an impressive £5,433.30 in a year. If you can keep this up, in six years you could have saved almost enough for a deposit (£32,599.80), without needing any other savings at all.

If you rely on that first sip of your morning coffee from a branded paper cup in order to start your 9-5, over a one-year period you will have consumed approximately 250 coffees, at a calculated cost of over £680 - so the potential savings to be had by bringing your own (or giving up altogether) are quite the buzz.

If you really can't quit your coffee habit, just think of it like this – after 12,223 coffees you will have spent the equivalent of a deposit on a house.

But, interestingly, this wasn't the biggest potential saving to be had out of all of the examples we reviewed. Calculations suggest that by forgoing fortnightly nights out, you could save an eye-watering £1,403.52 over 12 months, which might be incentive enough to suggest a night-in instead of painting the town red next time you arrange to see your friends.

Other indulgences that can be cut out to help you on to the property ladder include:

Adam Day, Managing Director at Hatched, commented on the findings: “The formula, in essence, is simple – spend less and save more – but we know this can be easier said than done. By consciously cutting out things that you don't need, you can substantially add to your pot of savings towards a deposit on a new home.

"In isolation, these specific sacrifices won't be enough, and so you'd have to be committed and willing to cut out multiple luxuries to make a real impact. But remember - when it comes to saving for a deposit on a house, making sure to put a chunk from your pay-check into a savings account each month is still as important as it ever was.

"This amount of lifestyle changes that we are suggesting might be difficult for some people to implement in their everyday lives, but it's only a short-term sacrifice in the long run, and if you're looking to buy a property with another person, say a partner, then you can get to your goal twice as quick.

“With our advice, prospective homeowners can sooner be in better financial positions to get themselves onto the property ladder. As they say, 'Look after the pennies, and the pounds will look after themselves'. A mantra to stick by, if you ask us..."

(Source: Hatched)

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