If your bridging loan is nearing the end of its term, but you’re not ready to repay it, you should consider a refinance bridging loan. These loans, also known as re-bridging loans allow you to take out a new bridging finance agreement to repay your existing one.
The most common reasons to refinance a bridging loan are due to the exit strategy failing, or planned refurbishment work taking longer than anticipated.
We’ve helped countless clients in refinancing their bridge loans over since we were established in the year 2000 and have relationships with all of the leading lenders. Get in touch to find out how we can help you.
How does a refinance bridging loan work?
A refinance bridging loan works by giving you a new bridge to repay your existing one. This new loan then gives you the benefit of a longer loan term and the ability to focus on repaying the loan through your chosen exit strategy without fear of repossession or conflict with your current lender.
What can I use bridging loan refinancing for?
Bridging loan refinancing can be used to repay any existing bridge.
Common reasons for bridging loan refinancing are:
- Repaying an existing loan.
- To give more time for essential property work to be completed.
- To give yourself more time to sell the security property.
If you’re looking to refinance another type of finance, such as a mortgage or loan, you will be eligible for standard bridging loans.
Equally, loans to repay development finance will be eligible for development exit finance, rather than a refinance bridging loan.
Bridging loan key product features
|Max LTV||Up to 85%|
|Interest rate||From 0.47% per month|
|Charge types||1st, 2nd & 3rd considered|
|Term||1-36 months (maximum 12 months for regulated bridge loans)|
|Interest type||Added to the loan, deducted or serviced|
|Completion timescale||5 days – 3 weeks|
- Residential, commercial property or land acceptable
- Available to individuals, partnerships, LLPs, Ltd companies, offshore companies, foreign nationals and pension funds
- Minimum applicant age 18 years – no maximum age
- Available in England, Scotland, Wales and Northern Ireland
- Adverse credit accepted (on a case by case basis)
- We assess all bridge loans on an individual basis
Will I pay more for a re-bridging loan?
No, the loan rates you pay won’t necessarily be higher, as long as you have a solid exit strategy and suitable security property.
Whether your loan was residential bridging, commercial bridging, a bridge to finance development or even auction finance, it’s still possible to get a good interest rate on a rebridging loan.
How long does it take to arrange a refinance bridge?
Re-bridging loans can be arranged very quickly, usually in 5 days – 3 weeks. If you have a strong exit strategy and property, you have a good chance to complete quickly.
When looking to finance development or refurbishment, the lender will need to look further into the works required, meaning your application may take a little longer to complete.
What are the benefits of this type of loan?
The benefits of refinancing bridging finance are:
- They allow you to repay an existing loan that is coming up to the end of its term
- You can get the funds that you need quickly
- They remove the risk of your current lender taking action to redeem their funds
- As they are another bridging loan, they are ideal if you’ll be undertaking refurbishment work on the property
- They may allow you to raise additional funds
Does my exit strategy affect my loan application?
Yes, your exit strategy is particularly important for bridging loans that are being used to refinance an existing loan. That is because the lender will focus on ensuring that you don’t end up back in the same position at the end of the term.
The new lender will want to make sure that your exit strategy is very strong and will usually prefer you to exit the bridge loan through sale of your property or refinance to a mortgage (either residential or buy to let, depending on the situation).
Will I qualify for re-bridging finance?
Yes, as long as you have a strong property, reliable way of repaying the loan and sufficient equity, you have a great chance of qualifying for a re-bridging loan.
For confirmation of whether your current circumstances would be acceptable, contact us and our team of bridging loan experts will get you an agreement in principle within hours.
What information will I have to supply when I apply for these bridge loans?
When applying for a refinancing bridge, you must provide the following:
- Your personal and financial details
- Details of the security property
- Details of your method of repaying the loan
- Proof of income, if you will be paying the interest monthly
Can I repay this type of loan early?
Yes, if your exit strategy comes to fruition early, you can repay the loan early with no early repayment charges or penalties of any kind with almost all lenders. Whether you’ll be refinancing or selling the security property, early repayment is usually encouraged.
Do you charge a fee for rebridging loan applications?
No, at ABC Finance, we don’t charge a broker fee for bridging loans that will be used to refinance and existing bridging loan. We pride ourselves on saving people money on their borrowing needs and as such, avoid charging fees unless absolutely necessary.
Rebridging loan FAQs
Here are some of the questions we’re often asked on this subject.
What loan term can I take?
Rebridging loans can be taken over a term of 1 month to 18 months. In most cases, the interest can be added to the loan, leaving you with no monthly payments to make.
Can they be taken out against any property?
Yes, as long as your property meets the lenders criteria, we can lend against it. We can offer loans in England, Scotland, Wales and Northern Ireland.
Can I not just buy myself time with my existing lender?
You may be able to, but when it comes to bridging loans, lenders tend to be very focussed on getting their money back quickly at the end of the term. As such, there is often not a great deal of room for delays, so unless your lender has specifically said that they will give you additional time, you should prepare to look elsewhere.