Many clients contact us to discuss raising money where traditional finance is not available and they need a more bespoke offering. We have experienced Bridging Loan brokers who can help you raise money for projects such as:
Buying a Property at Auction – With auction purchases, you have to complete generally within 28 days, so you need finance arranged quickly.
Uninhabitable Properties – Buying a property that has no bathroom, no kitchen or major structural repairs are needed.
Conversions – For example, buying a house and you wish to split this into flats.
Chain Break – You want to move, but your buyer has pulled out – however you want to complete the purchase.
Given this funding’s specialist nature, if you need this solution, it is best to speak with a bridging loan broker.
What is a bridging loan?
A bridging loan is finance that is secured on land or property. If the purpose for the loan is related to your main residence then this is classed as a regulated loan and the maximum term is 12 months, whereas if the loan is for purely business purposes it is classed as a non-regulated loan and the term can be up to 18 months.
Bridging loans are bespoke finance that is tailored to each individual project and this is where an experienced bridging loan broker is essential to understand the transaction and arrange suitable finance.
What costs are associated with bridging loans?
These are the typical fees that will be involved:
Valuation Fees – the price of this can range depending upon the property value and the overall project.
Arrangement Fees – Lenders will charge an arrangement fee and these typically range from 1% – 2%.
Exit Fees – in some cases there may be an exit fee when you redeem the loan.
Broker Fees – Some brokers may charge a fee for helping you arrange this finance.
Solicitor Fees – When appointing a solicitor make sure they have experience in dealing with bridging loan transactions.
Monthly interest – The lender will charge you a monthly interest rate and this rate will be based upon many factors such as the loan size, credit profiles, deposit/equity involved and the overall project.
Before taking out a bridging loan make sure you are fully aware of all the costs involved.
Is a bridging loan right for me?
Bridging Loans can be expensive, and they often involve important assets being used as collateral. Therefore, people must determine if a bridging loan is the best solution for their needs.
You should review your finances and work out if you have safer, more affordable or less risky options to finalise your deal such as a standard mortgage or further advance from your existing provider, or perhaps family could help. In many cases these options are not viable and a bridging loan is the only option.
In this regard, it makes sense to speak with a specialist broker to ensure you understand the consequences of this style of loan.
What is a bridging loan broker?
A bridging loan broker specialises in helping people who need a bridging loan find the most suitable option for their needs.
Many bridging loan lenders offer their products via specialist brokers and clients cannot go direct to them – therefore, the only way you can be confident of finding the full range of bridging loan options is to work with a specialist broker in this field.
If you have worked out that you need a Bridging Loan, it is best to liaise with a broker. These professionals save you time and work, and they ensure you see the broadest range of finance products available to you.
What are the advantages of a bridging loan?
Some of the reasons you should consider using a bridging loan include:
You need to access money fast.
You need to borrow a substantial amount of money.
Flexibility – You need the borrowing for a bespoke project.
Be aware that a bridging loan is secured against property, there are high-interest rates involved, and it often carries a range of fees. However, even with these drawbacks, if you believe a bridging loan is best for you, it is best to work with a bridging loan mortgage broker to find the best solution for your needs.
How to explore your mortgage options with The Money Hub
Call us on 0203 725 5830 and speak to one of our highly specialised and experienced Bridging Consultants or you can complete an enquiry form which will allow you to schedule a telephone appointment.
DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.