What Is A Bridging Loan?
A Bridging Loan is a short term, interest only loan on your property and is used to ‘bridge’ a short-term gap in a person’s finances. Rates range from 0.44% to 1.5% per month generally with loans available up to a 24-month term.
How Much Can I Borrow?
The key factor in working out how much you can raise through a bridging loan is the loan to value (LTV). This is worked out by dividing the loan amount by the value of the property and multiplying it by 100 and is expressed as a percentage. Usually, lower LTV’s secure the best rates.
For residential properties, we are able to lend up to 80% LTV with 70% being the maximum for commercial bridging loans. Of course, each application is judged on its merits so by having a quick chat with one of our experts, we will be able to tell you exactly how much you are eligible to receive.
Where there is additional security available some bridging loan companies lend up to 100% LTV or even beyond if needed for refurbishment or further property investment.
Bridging Loan Rates
Bridging loan interest rates vary depending on the risk of the application. Low-risk applications can see rates from 0.45% per month. On top of the interest rate charged, the fees can affect the overall cost of the loan.
When offering terms to our clients, we always take into account the total cost of the bridging loan. This means the lowest rate may not always be the best product for you. Our advisors walk you through this process to help understand which product is best for your needs and why.
Bridging loan rates vary depending on the type of security. Commercial bridging loan rates will usually start at 0.75%. For a bridging loan secured against only land, rates of just under 1% per month are realistic, although depending on location and other factors, this could increase slightly. By talking to one of our bridging loan experts, you will receive a personalised quote quickly and in writing.
How Quickly Can I Complete?
It is possible to complete an application and release funds in as little as 48 hours. Although it is common to see adverts promising this, it tends to be the exception rather than the rule and a week is a more reasonable completion time.
Commercial bridging loans can tend to take slightly longer as surveyors tend to take longer to complete the more complex commercial survey report and the legal process can also take slightly longer.
When you need to take out a bridging loan in a hurry, whether it’s to purchase at auction, secure a property before your current one is sold, we are always happy to discuss your circumstances. We will be able to give you the information that you need, fast to get you the best loans available.
How Does The Bridging Loan Process Work?
- Get in touch with us by either enquiring through our website or giving us a call on 0800 088 6008 and we will have a no obligation conversation with a bridging loan expert. They will talk through your circumstances and offer initial terms on the best terms available to you.
- We will send out a decision in principle within 2 hours outlining the terms available from the best bridging loan companies including any fees and charges that may be payable. Before issuing terms we always ensure the lender will be appropriate in terms of both costs and how quickly they can complete the transaction.
- Once you are happy with the terms and understand exactly how the product works we will start the application with the lender. We would then instruct the valuation (if one is needed on your application) and legal process as soon as they are happy with the information received. In cases that are less urgent, we are able to delay the legal work until you are happy with the results of the survey.
- Once this work’s done you are free to drawdown on your bridging loan and complete on your property transaction/refinance.
Do You Have A Minimum or Maximum Loan Size?
No – As a whole of market bridging loan broker, we have products to suit almost every enquiry, we don’t operate a strict minimum or maximum loan size and officially offer loans from £5,000 up to £80,000,000, however we are always open to discussing loans outside these boundaries if it is an application that makes sense.
Do You Offer Regulated Bridging Finance?
Yes – We are fully FCA regulated and as such are able to work with regulated mortgage lenders to secure you lending against residential owner-occupied property.
Do You Have Ties To Any Particular Bridging Finance Companies?
No – We are a whole of market mortgage broker and assess your application based on your individual circumstances and secure the best possible terms for you, negotiating with lenders to secure lower than usual rates or to increase lending above the usually agreed limits if required to do so.
Do I Have To Make Monthly Repayments?
Although some clients do choose to make the monthly interest payments, most clients choose to roll the interest into the loan. This means the interest is either added on, or deducted from the loan amount leaving you with no payments to make during the agreed term of the loan.
What Types Of Property Do You Lend On?
We can offer bridging finance on both commercial and residential property. All types of property can be considered, below are some examples:
- Residential Property
- Industrial & Warehouses
- Uninhabitable Properties
- Care Homes
- Retail Unites
- Farm Land
We can only cover a small selection in the scope of this page, but if you have a property you wish to discuss get in touch and we will be happy to consider it. Through our connections at many lenders we can lend on almost any security.
Are Your Bridging Loans Available To People With Adverse Credit?
Yes – If you have suffered credit problems in the past there is a high chance we will still be able to provide you with a suitable product. We have a team of experts ready to talk through your application and our extensive contacts at lenders mean we can usually able to get your application agreed despite previous issues, whether that is credit or other issues in the past.
Why Should I Work With ABC Finance?
Bridging loans can become complex, we have gained vast experience in dealing with many bridging finance companies to secure the best possible terms for the thousands of clients we have helped in the past and by using that experience, along with our passion, to think outside the box to secure the best possible terms for every client who contacts us, we believe we are an ideal partner in raising a mortgage, whether you are a veteran or looking for initial information for the first time. There are many bridging finance companies lending and therefore understanding all of their criteria can become an ordeal, we speak with bridging finance companies on a regular basis to ensure we are fully up to date with criteria meaning we can secure the best rates quickly.
For free no obligation advice, enquire online now or call 0800 088 6008 to speak to one of our ABC Finance bridging loan experts. Alternatively click here to read The Complete Guide to Bridging Loans, or click here to try out our Bridging Loan Calculator.