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Bridging Loans

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Property Purchasing Power from The Buy to Let Broker   

Top Bridging Deals of the Week  

 

Rate per month

 

Loan Term

 

Max. Loan to Value

 

Loan Size

 

Arrangement Fee

 

0.59% - 1.20%

 

1 - 18m 75% £50k - No limit 2%
0.65% - 1.50%

 

1 - 12m 75% £100k - £5m  2%
1.00% - 1.50%

 

1 - 18m  75%  £50k - No limit   0%

Buying with a bridging loan is very liberating.  If you haven't used bridging before, the easiest way to describe it is that it's the closest thing to cash that money can buy. 

A bridging loan* is a very flexible form of short term finance, usually with a term of 6-18 months.   

Although an excellent product, we only advise the use of bridging loans carefully and in specific circumstances where traditional finance fails. 

"The closest thing to cash that money can buy" 

It is meant as a ‘bridge’ to your 'exit route' which could be the sale of the property or long term finance for example.  Bridging allows you to access property that may otherwise be out of reach without the use of cash.  It's superfast, funds can be drawn down in a week, so if your solicitor is on the ball a fast purchase is very possible indeed. 

So when can you take advantage?  

  • Transactions with very tight deadlines, eg contract races.
  • Property that is in tired condition, and indeed property in desperate need of heavy refurbishment.
  • Change of use - from commercial to residential as an example.
  • Where speed is your absolute priority, for example Auctions
  • If you are buying a property you consider to be undervalue, you may be able to borrow a higher loan to value based on contract price. 
  • Where there is a requirement for minimal underwriting.  
"Bridging loans are not cheap, but the costs are only relative to your likely returns" 

If you’re an existing investor you’ll no doubt be aware that buy to let lenders require property they are financing to be in 'lettable’ condition'.  So the house must have a working kitchen and bathroom and generally be in decent condition to secure funding.  In this scenario you would need the use of bridging finance or have very deep pockets to avoid having to have to walk away.    

Bridging loans can be superfast – it is possible to complete within a week assuming your legal team are on the ball.  This is on a par with a cash purchase so it really puts you in the driving seat as a buyer, using a bridging loan broker will help you secure the best the market has to offer and release the pressure of finding suitable funding.   

What does a bridging loan cost?   

Bridging loans tend to cost a flat rate per month starting at 0.59% for low loan to values, so clearly they are not designed as a long term solution.   

Other fees will include a valuation fee, arrangement fee, legal fees and with certain lenders an exit fee, so it’s vital to make use of a specialist broker, as we can usually find a deal which will suit the project and of course most importantly, you and your goals.   

Yes, you might say it’s expensive but the costs are only relative to the likely returns on the project you are considering and this will dictate whether the costs are prohibitive or not and of course there may be no other way to finance the project.   

What is certain is that expert advice from a specialist could mean the difference between a good investment and a bad one.  We don’t charge any upfront fees and for larger bridging loans expect to pay no broker fee at all.  You’ll know all aspects of the deal before you start the ball rolling so to speak.   

We work in a similar manner across the board, we'll build a profile of you and what you want to achieve therefore any solutions we recommend have a solid foundation.  We can then recommend the best options for your project and we avoid chasing avenues which aren’t feasible for you.   

Please give us a call and we’ll have a chat about your options, talk to one of our experienced consultants now...   

We're on 0800 949 9410.  Or you can get in touch here   

The Buy to Let Broker - 'We Invest in You’  

 

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