We receive a variety of enquiries both mortgage and bridging loan related. Below is an example where a bridging loan was able to help a client to achieve their goals.
Overview of bridging finance case study
The client had a property worth £400,000 which was refurbished to a high specification, but, he needed to borrow further to complete the works to reach its full potential value (Kitchen, Double Garage, Landscaping, etc). The client also had been off work unwell at the start of 2019 for several months, so his latest years accounts were low, compared to their previous years. The client wanted to complete the property and sell within 6 months, allowing them to purchase their next home for cash. The client is an experienced builder and has managed several extension/rebuild projects over the last 10 years.
Solution
A standard mortgage was not possible due to his last year’s accounts being low, plus he only needed the loan for 6 months.
We raised £70,000 as a bridging loan which allowed the client to complete the works needed, the house then went on the market after 2 months. The property was sold in month 5 of the bridging loan for £510,000.
Reasons for a bridging loan:
Chain Break – Has the buyer for your property pulled out and do you need to find a new purchaser? We could help you complete the new purchase without the need to sell your property at the same time.
Uninhabitable Properties – If you have bought a property that has no bathroom &/or kitchen, for example, a standard mortgage lender would class this as uninhabitable and therefore would not lend against it. A bridging loan could provide the funds needed to purchase the property, refurbish it, and then a standard mortgage could be used to pay off the bridging finance.
Auction Purchase – Generally you have 28 days to complete any winning bids at an auction, so we could help provide you with the funds to allow this to happen.
Flexibility – A bridging loan can be used for a wide variety of projects. Lenders look at each enquiry on a case-by-case basis.
Speed – If you need funds quickly, this type of loan could be a solution for you.
If you have any bridging loan enquiries that you would like to discuss please call us or make an enquiry.
DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.
