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Bridging Loans

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Bridging Loans are the closest thing to cash that money can buy and in the right circumstances are a rapid route to purchasing property, leveraging bargaining power to your advantage. Bridging allows refurbishments and developments of all sizes.

To speak to an adviser, call us today on 0800 949 9410

 

Top Bridging Deals of the Week

Rate Per
Month
Loan Term Max Loan
To Value
Loan Size Arrangement
Fee
0.44%-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%

  

 

Why Should I Use a Bridging Loan?

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. You might also see bridging loans referred to as Auction Finance, Bridging Finance, or Development Finance.

Bridging loans are an excellent product in the right hands for the right project, we only advise the use of bridging loans carefully and in specific circumstances where traditional finance fails and where we have a suitable exit route for you. 

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. 

 

When Should You Use a Bridging Loan?  

Don't forget that the costs of a bridging loan are only relative to your likely returns, they are indispensable when they enable projects that would ordinarily be out of reach.  So although interest costs have come down considerably over the last 12 months, they still aren't considered 'cheap' compared to long term buy to let finance.  However, bridging lenders will lend where other traditional routes fail:

  • Rapid Speed Requirement - Transactions with very tight deadlines, e.g. contract races/auctions.
  • Renovation Need - Light Refurbishment & Heavy Refurbishment project
  • Chain Break - Avoid relying on a purchaser for existing property sales.
  • Change of Use - Development of an office block to residential use for example.
  • Auction Purchases - 28 day exchange should be easily achievable.
  • New Build Development - Purchasing land or building new housing development.
  • Conversion - Converting a house to flats for example.
  • 100% Loan to Value - Using additional security. 
  • Short Lease - purchase to extend lease and remortgage. 

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 0.44% 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.     It is worth noting that interest can be rolled up to limit your outgoing costs during the project.   

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. Often to negate the worry and to to keep costs down to a minimum.

 

How Can I Get a Bridging Loan?

Whether you're looking to invest in London or Lands End, give us a call on 0800 949 9410.  We'll take the time to talk to you about your situation, we FCA 're regulated brokers with a whole of market offering.  We have no allegiances to specific lenders and will make sure you get the right deal for your project time after time.  And we're not a high powered sales environment either, so please call us for straight talking advice.  Feel free to chat through your plans with one of our experienced consultants now. 

 

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