Regulated Bridging Loans
Get A Regulated Bridging Loan
Get the best regulated bridging loan deal with ABC Finance and pay no broker fee.
Over 30,000 loan-seekers helped
FCA Authorised – Fully regulated
Receive your funds in as little as 5 days
Market-leading interest rates
CeMAP Qualified Advisors
No Broker Fees
Author: Gary Hemming CeMAP CeFA CeRGI CSP
20+ years experience in bridging loans
Why choose ABC Finance?
At ABC Finance, we specialise in offering the best bridging loan deals from across the market. We work with all of the key lenders and avoid those who don’t meet our strict standards of fair treatment of customers.
We not only help our clients to find the perfect deal quickly, we also help to manage the application through to a fast and straightforward completion. If you want to find the best bridging loan deal, and have full support throughout the application process without paying broker fees, ABC Finance is the perfect choice.
Key product features
Key Features
Max LTV
Up to 75%
Interest rate
From 0.55% per month
Charge types
1st, 2nd charge
Term
1-12 months
Interest type
Added to the loan, deducted or serviced
Completion timescale
5 days – 3 weeks
Criteria
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)
Loans from £25,000 with no maximum loan size
What is a regulated bridging loan?
A regulated bridging loan is a short-term, property backed loan which is secured against the borrower’s main residence – their home.
They are often used to fund the gap between the sale of an existing property and the purchase of a new one.
Regulated bridging finance are available when you wish to raise money against your own home, or a property that you intend to live in.
When is a bridging loan suitable?
Regulated bridging loans are suitable when you’re looking to raise funds quickly, or where you’re looking to purchase a property before selling your existing one.
Common uses include:
- To repair a chain break – They’re often used as a form of chain break finance to secure funds quickly, borrowing against both your existing property and the new one.
- To complete a fast purchase – If you’ve purchased a property and need to raise funds quickly, for example, if you’ve been let down by your mortgage lender, or you’ve purchased a property at auction and a traditional mortgage would take too long to complete. This is known as auction finance.
- You’re purchasing a property that needs refurbishment – Bridging loans are often used to renovate property before refinancing it to a mortgage or selling it. This is known as property refurbishment finance.
- To prevent repossession – If you’re facing repossession, bridging finance can be used to refinance your home before either remortgaging to a new deal, or selling the property. This approach is often used by those who plan to ultimately sell as a way to ensure they achieve the full market value on sale.
- Funding care fees – when moving into care, many providers require a number of months payments upfront. This can be out of reach for many and can mean moving to a less desirable care home. Bridging loans can be used to release equity for the fees, giving you a greater choice of homes.
In these situations, FCA regulated bridging can be used as a short-term loan used to “bridge the gap”.
How much can I borrow?
We can offer loans from £15,000 with no maximum loan size.
The main points that will impact your maximum loan are the loan to value (LTV) of your application and your exit strategy.
LTV is the amount you are borrowing as a percentage of the value of security offered – your property or properties.
Your exit strategy is how you will repay the loan. Your lender will want to ensure that whichever exit strategy you choose will be sufficient to repay the loan in full.
How much do regulated bridging loans cost?
Bridging loans regulated by the FCA cost between £550 to £850 per month per £100,000 borrowed.
This equals an interest rate of 0.55-0.85% per month for most applications.
On top of the interest charged, you can expect to pay an arrangement fee, which is usually 1-2% of the loan amount.
The interest rate and arrangement fees charged depend on the loan size, LTV, your credit history and the strength of your application.
Frequently Asked Questions
How long can I borrow the money for?
Regulated loans are available from 1 day to a maximum term of 12 months.
This is governed by FCA rules, so longer terms are not available for this type of borrowing. As a guide, unregulated bridging loan products (for example, those used for property development) can be taken for longer, often up to 18 months, or even 36 months in some cases.
How much deposit is required?
Our maximum LTV is 75%, meaning you must pay a minimum deposit of 25%.
Where a loan is being taken over more than one property, your LTV is calculated over both properties, meaning you can borrow a maximum of 75% of the combined value of both properties.
Will I qualify if I have bad credit?
Yes, we can offer funding to borrowers with a poor credit history. We offer a specialist range of bad credit bridging loans for borrowers in this situation.
If you’re worried about whether you qualify, get in touch to talk through your circumstances with our experts. They will be able to quickly inform you whether we can offer a suitable product.
Do you offer bridging loans outside the UK?
No, at ABC Finance, we only offer bridging loans for property or land in the UK.
Who regulates ABC Finance?
ABC Finance are authorised and regulated by the Financial Conduct Authority (FCA). We also subscribe to the Financial Intermediary and Broker Association (FIBA).
FIBA is a voluntary professional body focussed on delivering excellent products and services to clients.
Do I have to pay the interest each month?
This type of loan requires the interest to be rolled into the loan and paid at the same time that the loan is repaid. This is known as ‘rolled up’ interest.
What documents will I need to provide when applying for regulated bridging?
You will generally be expected to provide the following:
- Details of any mortgage for accounts for second charge applications.
- Proof of ID & residency.
- Statements for your bank and savings accounts.
- Proof of income (payslips and accounts for business owners).
- Proof of your chosen exit route.
What are the main criteria and requirements for getting a bridging loan?
To qualify, you must meet specific criteria and requirements. The purpose of the loan is crucial, whether for property purchase, to keep a property chain alive, property portfolio investment, or business purposes. Lenders look at your income, assets, and overall financial situation. The valuation of the security property is key, as is your repayment strategy, known as your exit strategy.
Your credit history plays a significant role, as does having the right documentation. Working with intermediaries, such as brokers, can help streamline the process, ideally one with strong experience who doesn’t charge a broker fee.
Additionally, their understanding of the regulations and legal aspects is key.
How do bridging loans differ from traditional mortgages, and what are the typical rates and charges?
Bridging loans differ significantly from traditional mortgages.
They are designed for short-term finance solutions, typically ranging from a few weeks to a year, whereas mortgages are long-term loans. Bridging loan rates are usually higher, reflecting the short-term and urgent nature of the finance.
Various charges are associated with bridging loans, including arrangement fees, valuation fees, legal fees, and potential early repayment charges.
The costs can vary widely based on the lender, loan size, and specific application details. It’s essential to undertake a comparison different regulated bridge loan products and seek advice from experienced brokers to understand the differences and risks involved.
What makes regulated bridging loans a flexible and fast financing option?
Bridging loans are known for their flexibility and speed. They can be arranged quickly, often within days, making them ideal for urgent property purchases or to address immediate financial needs.
The flexibility includes options such as rolling up interest, which allows you to defer repayments until the loan term ends.
However, the risks include higher interest rates compared to traditional loans and the pressure of having a solid exit strategy. The risks are amplified if the property market fluctuates or if your financial situation changes.
It’s crucial to have a clear purpose for the loan and to understand the factors that could impact your repayment plan.
Engaging with experienced intermediaries and seeking advice from financial professionals can help navigate these risks effectively.
