Bridging Loans

A Mortgage 4 You can help with all types of bridging and development finance.

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Can we help with Bridging Loans?

YES We Can

Bridging Loans have become very popular in todays mortgage market because they are very quick to arrange and are designed to be as flexible as possible, and do not require you to service the debt during the term of the loan.

How is this possible you may ask, the product is unique because it is secured on a bricks and mortar asset with a current ceiling of 80% Loan to value and the bulk of the fees and the monthly interest is rolled up within the facility. This allows clients to concentrate on the business of rebuilding or refurbing the asset prior to the sale of the asset from which the bridge will be repaid.

The proposed exit route from the bridge is what lenders need to be comfortable with, and this is often the key to the success of the application. When the lender can see that exit plan is viable and makes allowance for any perceived changes that may occur in the market, they are far more likely to say yes.

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What can Bridging Finance help you achieve

1 Purchase of Land

2 Purchase of residential or commercial property

3 Buying at Auction

4 Buying below market value

5 A chain breaker when you want to purchase but have not sold your property

6 Release capital

7 Pay off short term debts

8 Improve cash flow

9 Portfolio Investment

10 To raise funds in the short term when your credit profile may not allow you to borrow money from normal sources

Bridging Loan Questions and Answers

What is a bridging loan?

Answer: A bridging loan is a form of short term funding, secured on residential or commercial property, on an interest only basis. The interest is rolled up into the facility, including the majority of the fees, for a period not normally exceeding two years.

Can a bridging loan be arranged quickly?

Answer: A big YES. We would expect to produce indicative terms on the same day. Completion is then possible as soon as all the supporting paperwork has been received by the lender, including the valuation, and funds can be released within 48 hours.

Over what term can a bridging loan be taken out for?

Answer: A bridging loan can currently be arranged from no minimum term, to a maximum term of three years.

What is the maximum loan to value (ltv) that I can borrow on a bridge?

Answer: With a normal bridging facility the maximum ltv would be 80%. On development finance this would not exceed 70% of Gross Development Value (GDV) except in exceptional circumstances.

Can I buy below market value?

Answer: If you are purchasing below market value it may be possible to borrow up to 100% of the purchase price.

If I need to borrow more than the 80 % LTV can I offer another property as security on a first or second charge basis?

Answer: Yes, most lenders would agree to this, providing the funds were being used to renovate or purchase the property.

Can the loan be repaid before the end of the term?

Answer: Yes the loan can be repaid early without penalty and any unused interest is returned to the borrower.

What can a bridging loan be used for?

Answer: A bridging loan can be used for the purchase or refurbishment of a property, whether commercial or residential, to provide short term working capital or an auction purchase, a chain breaker or repaying tax bills, including VAT

Are there any up-front fees?

Answer: There are no up-front fees to pay upon application but you would normally be expected to pay the valuation and legal fees prior to completion.

What is the most important part of the lending policy for granting a bridging loan?

Answer: All lenders, without exception, need to feel comfortable that you have a viable exit plan in place. This can be something like a remortgage or sale of the property, or from funds that you are expecting from inheritance or another source. Lenders just need to see evidence of how you intend to repay the loan.

If I have an adverse credit profile will lenders refuse my application?

Answer: Some lenders will say no, but there are other lenders who will take a view if they are comfortable with the exit plan, however any adverse credit may have an impact on the terms of the loan.

What is the main advantage of a Bridging Loan

What is the main advantage of Bridging Loan’s

Bridging loans are a pure asset based finance which do not require you to service the debt during the term of the loan, therefor they are approved very quickly once the asset has been valued and completion can take place in a matter of day’s if the Solicitors are all working as a team to get completion over the line asap.

Is there a downside to Bridging Finance

What all clients have to factor into their business plan is that Bridging Finance is not cheap money and in an ideal world you should get out from the facility as quickly as your plan will allow you to.

For those clients who overrun the agreed term of the loan it can be a very expensive exit, and this should be avoided at all costs.

Bridging Finance

Bridging Finance is an asset based loan secured on land or bricks and mortar, and has a fixed term up to 24 months with a normal maximum loan to value ceiling of 80%, without additional security. The debt does not have to be serviced during the agreed term, as the interest and fees are rolled up within the facility, making it very cash flow friendly. What all lenders require is a viable exit plan, in order that they can be assured the debt will be repaid within the agreed timeframe. Bridging Finance is quick to agree and can be completed very quickly, with the minimum of paperwork.

Purchase of Land

Bridging can be a life saver when trying to purchase land that is awaiting planning, and can then be sold on for development, or where the high street bank is taking their time making a decision, and a bridge will keep the deal alive. Also buying land at auction where speed is of the essence, bridging again comes to our rescue with the minimum of fuss.

Why should you use a Broker

We have access to the whole of the Bridging Market and this market changes very rapidly with lenders constantly tweaking their terms to remain competitive and keep their market share. Our re-search is essential to make sure that we are offering the most competitive terms to meet your needs.

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A fantastic service run by fantastic people. Always kept us updated a long the way from getting our mortgage offer all the way to completion, topped off by a lovely gift! Thank you Michael and Karen for everything you have done for us.
Dan and Chantelle
– Dan Webb – Reviews.co.uk

Relevant Products

Fixed Rate Mortgages

We can help with a range of fixed rate mortgage products with competitive rates and terms.

Tracker Rate Mortgages

If you are looking for a mortgage with a rate that follows the base rate set by the bank of England – we can help.

Capped Rate Mortgages

If you are looking for a capped rate mortgage we can help, we have access to a wide market of lenders who can help.

Bad Credit Mortgages

If you have bad or adverse credit we may be able to help you secure a mortgage – from IVAs to CCJs we can help.

Standard Variable Rate Mortgages

If you are looking for a standard variable rate mortgage with competitive rates & terms we can help.

Repayment Mortgages

We can help with repayment mortgages – you’ll make monthly repayments for an agreed period of time on capital & interest.

Can We Help?

Bridging or short term finance is the most flexible and Quickest way to raise funds from £25,000 up to £100m (Up to 80% LTV) as it is a pure asset secured facility and does not require you to service the debt during the term of the loan, only to provide a viable exit plan. The funds can be used for you to achieve a number of goals:

Bridging Finance, Purchase of Land, Development Finance, Portfolio Investment, Buying at Auction, Buying Below Market Value, Where speed is the issue to Complete, Chain Breaker, Release Capital, Pay Off Short Term Debts, Improve Cash Flow, Bad Credit Profile, Purchase or Remortgage of Residential or Commercial Property.

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What are the main attractions of Short term Finance?

Proof of Income ?

1 You do not have to prove income to service the debt during the period of the facility. All of the interest and charges are rolled up within the loan, leaving you free to concentrate on your business.

Period of the Loan.

2 The period of the loan can be anything from from One day, to in some cases Three years, with no exit penalty and any unused interest being refunded on an early completion.

Chain Breaker

3 Bridging can be used as a chain-breaker, where clients need to exchange contracts now on their purchase, but have a delayed completion on their sale

Auction Finance

4 Buying property at Auction puts pressure on the client from day one with the time frame, whereby clients are expected to exchange contracts 28 days after the deposit is paid on the day of the auction. With Short term finance this is not a problem, and we now also have a new Bridge To Let product that maybe of interest to clients looking to expand on their Buy to Let portfolio.

5 Property Developments.

This is an area where short term finance really shines, and demonstrates just how flexible and adaptable to changing circumstances it can be. The facility can be built around the clients needs with the ceiling on most developments being 70% of GDV, ( Gross Development Valuation ) . With this in mind, how the funds are to be drawn down and at what stages are agreed from outset. Clients are then charged interest only on draw down, with a planned exit route of a sale or refinance of the property. Timing is critical to avoid going outside an agreed time Frame and incurring penalties.

6 Cash Flow

This may not be an obvious area to all clients, but many have found quick and easy access to funds to enable them satisfy some unexpected pressure from their bank on the agreed overdraft, pay off a Tax demand, clear unsecured debts, improve the current level of cash flow.

7 Release Capital

The high street banks at this moment are not exactly opening the doors to new lending and are very risk averse. Some businesses are missing out on the opportunity to buy at the right price, or to expand when the opportunity arises. Short Term Finance may have the key to the bank vault

8 Bad Credit Profile

Having a Bad Credit Profile may preclude you from arranging a mortgage with lenders who base their decision to lend on Credit Scoring, but with Short Term Finance, the exit route is the requirement that is set in stone. If we can satisfy the lender that we are in control of this, your credit profile is not the issue that it would be with most lenders.

All clients should be aware that Short Term Finance is a bricks and mortar mortgage secured facility, normally on a first charge basis, with no requirement to prove that the debt can be serviced from income. What ALL lenders require without exception is a viable and acceptable exit route from the facility at the end or before the end of the agreed term of the facility.

The Financial Conduct Authority does not regulate bridging finance unless it is secured on your principle residence.

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A MORTGAGE 4 YOU

Why should you use a Broker

For what purpose can I use Bridging Finance

Development Finance

Property Development Finance will provide you with short term funding to enable you to purchase residential and commercial property, land purchase, and to consider new builds and conversions

Residential Bridging

We offer residential bridging on all types of residential property, the property can be an investment property, or one that you own or intend to purchase. We have funding lines to help both for investment and where you live or intend to live

Refurbishment Loans

This product is normally used when an investment property cannot be mortgaged because it would not meet the lenders criteria and cannot be let in its current condition. Once the property has been refurbished it should be possible to remortgage onto a BTL product to take out the loan.

Cash Release

A bridging facility can be arranged to release cash to repay short term debts or pay tax or vat

Regulated Bridging Finance

Most of bridging finance is unregulated, but where you have lived, intend to live, or are living makes the facility a regulated product. We can help you with regulated loans which are normally chain breakers, or where the property needs work to make it habitable and would then attract a normal mortgage product

Auction Finance

This product has become very popular and widely used by property developers buying at auction where the purchaser has in nearly all cases 28 days after the offer has been accepted and a 10% deposit has been paid, to exchange contracts. Bridging finance can be arranged very quickly and drawn down on within the 28 day period.

Refinance Bridging

This product has become a very welcome one to the market where clients may overrun their existing facility and would suffer in most cases very severe penalties by not completing on an agreed date, this product enables the client to get the project completed.

Commercial Bridging

This product can be used to purchase or refurbish any commercial property, offices, shops warehouses, or even to solve a cash flow problem or the acquisition of stock or equipment

Land Purchase

Funds can be made available to purchase land with or without planning.

Second Charge Bridging

This facility is available and can be used providing the lender with the first charge agrees to the second charge

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THINGS THAT WILL IMPACT YOUR CREDIT

Turned down elsewhere? We can help!

Whether you have been discharged 3 years or 12 months – it doesn’t matter, we can help.

We’ve been helping discharged bankrupts get back on to their feet and back on to the property ladder despite their circumstances. Arranging a bad credit mortgage or mortgage product for discharged bankrupts is a scenario we regularly deal with. Even if you have a history of bankruptcy and resposession we have access to whole of market lenders who will consider your application on various factors.

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