Bridging Loans Essex

If you live in Essex and are considering taking out a bridging loan our experienced consultants would be happy to explain how it all works and the costs involved.

Why do people take out bridging loans?

A bridging loan is commonly used by property developers to purchase an asset which is not suitable for conventional mortgages. We see bridging finance typically being used for the following purposes:

• Buying at Auction - If you are successful at a property auction you will normally have to complete within 28 days and to achieve this through a standard mortgage is unlikely.
• Uninhabitable Properties - Possibly the property is in poor condition and has no kitchen or bathroom making it unsuitable to traditional mortgage lending.
• Change of Use - If you plan to make major changes to the building for example convert offices into residential flats or change a property into a HMO (House of Multiple Occupation).
• Chain Break - Maybe your buyer has pulled out and you need to sell to be able to complete on the new purchase.

It is important that you have a clear goal of how you intend to pay off the bridging loan also known as the exit strategy. Common exit strategies include:

• Sale of property - Once the refurbishment is complete maybe you intend to sell the property to pay off the finance.
• Re-Finance onto a Buy To Let Mortgage - Maybe you want to build a property portfolio, so therefore you intend to raise a buy to let mortgage on the property to clear the bridging loan and have a long term investment.