Bridging Loans London

  • Buying at Auction.

  • Uninhabitable Properties.

  • Change of Use.

  • Renovation Work.

  • Chain Break.

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Bridging Loans London

Given the cost and different types of property in London, it is no surprise that there are times when people need short-term/bespoke assistance on financial matters.

If you live or want to buy/develop in London and need a Bridging Loan, you should get advice from the experts. The costs associated with bridging loans means you want to make an informed decision, and we are more than happy to assist you.

Why do people require bridging loans?

The most common requirement for a bridging loan comes with property developers looking to buy an asset where a traditional mortgage isn’t suitable. However, the following reasons are common in London:

When buying at an auction, there is a 28-day period to complete the purchase, and conventional mortgages are typically not suitable due to the time frame; but a bridging loan is:

  • If a property is uninhabitable, being in poor condition or lacking necessary facilities, a conventional mortgage might not be available.
  • If the property is undergoing a “change of use”, such as an office block being converted into residential flats (Converting Commercial to Residential), a bridging loan is a common way to finance the deal.
  • When a break occurs in a property chain, bridging loans are commonly used to complete the deal at short notice.

Bridging loans are expensive, especially in London, so it is essential to have an exit strategy in mind. Some of the most common ways to pay off a bridging loan include:

  • Perhaps after refurbishment work, selling off the property and using the income to pay off the loan.
    Refinancing onto a Buy to Let Mortgage, Commercial Mortgage or a HMO Mortgage; which is useful for landlords increasing their property portfolio.

What lenders provide bridging loans?

It would be best to use a specialist lender to arrange bridging finance; this is not a service provided by all loan lenders. Many of these specialist lenders only offer bridging loans through brokers, and this is where we can best assist you.

We have helped many London residents and professionals arrange a bridging loan, and we look forward to assisting you with the process.

Be prepared for fees with bridging loans

As well as paying back the loan, there are often fees associated with bridging loans. It is not uncommon to face an arrangement fee of 1% to 2% of the total loan fee.

Properties in London are expensive, and additional costs like this are prohibitive. However, we are keen to help you find the most suitable bridging loan in London, so get in touch today.

How long can I have a bridging loan for?

If you intend to live in the property, you require a regulated bridging loan, which carries a maximum term of 12 months.

If the loan is for business purposes, you require an unregulated loan, and the maximum term is usually 18 months.

For property development loans, bridging finance can last for up to three years. Additionally Mezzanine Finance might be useful to help fund projects.

If you fail to repay the loan on time, you might have to pay additional costs. Therefore, you should look to be as confident as possible when applying for a bridging loan.

If you are looking to apply for a bridging loan in London, we can help you. We know the lenders who provide this service, and we can assist you in making the most robust application.

How to explore your bridging loan options with The Money Hub

Call The Money Hub Limited on 0203 725 5830 and speak to one of our highly specialised and dedicated Bridging Advisors or you can complete an enquiry form which will allow you to schedule a call time.

DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.

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