Bridging Loans For Pensioners

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Home » Bridging Loans » Types of Bridging Loan » Bridging Loans For Pensioners

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When would a bridging loan be right for a pensioner?

Bridging loans are a versatile borrowing tool, but best serve retired people when looking to release equity from their homes or downsize.

When looking to move home before your current property has sold, a bridging loan can be used to fund any financial shortfall and can be a more manageable lending alternative to a long-term loan alternative like a mortgage.

This can be especially useful when looking to refurbish your current home before selling, to maximise the sale price.

How long can I borrow the money over?

Loans secured against your own home are restricted to a maximum term of 12 months. This is an industry wide restriction, formed in regulation.

If you’re lending against an investment property, we may be able to offer terms over 12 months.

If you’re offered a first charge bridging loan term against your own home for longer than 12 months, this would be strange and suggests that the lender may not be regulated by the FCA. This would be considered a warning sign in this situation.

How would my bridging finance application be assessed?

Unlike mortgages, your income and credit history are not the most important factors when assessing a bridging finance application. The key factor in underwriting a bridging finance application is your method of repaying the loan.

This is known as your ‘exit strategy’. As such, we may be able to lend, even if you have minimal income.

Lenders assess each application on its own merits and as long as you have a reliable exit in place, there is a good chance that we will be able to help.

Will the lender want to know how much income I have?

Generally, the answer is yes, although if it’s very low, it won’t matter as repayment of your loan is not reliant on your income.

Lending decisions for bridging loans for pensioners don’t usually come down to an applicant’s income.

How much does bridging finance cost?

When looking to take out short-term bridging finance with an expert broker for a property that you either have or will be living in, we can offer interest rates from 0.48% per month.

Rates for pensioners who are looking to downsize tend to be near this level due to the equity that has often built up in their property.

In addition to the interest charged, there is usually a lender arrangement fee of 1-2% of the bridge loan amount.

The interest charged is usually able to be added to the bridging loan, meaning there are no monthly repayments to make. Instead, any fees due are paid when the loan is repaid, usually when your property is sold.

Our team are available to provide any further information you require on what’s available, the best interest rates and whether bridging finance is the best option for you.

Bridging loans for care home fees

When moving into a care home, funds are often needed to cover fees. This can be tricky due to age and lack of earned income. In this situation, we offer bridging loan lending to cover any fees and can manage the process for you from start to finish.

We work with lenders across the market to secure the lowest rates.

Does bridging finance have a maximum age?

No, we work with lenders who take a common-sense approach to application assessment. As such, we can offer bridging loans with no maximum age, where appropriate.

The key features of bridging loans for pensioners

We can offer bridging loans for pensioners with the following key features:

  • Rates from 0.48% per month
  • No maximum loan sizes
  • No broker fees
  • No exit fees
  • 1-month minimum loan term
  • No monthly payments
  • 1st or 2nd charge loans available

Choosing the right bridging finance options for retirees

Although they can provide real benefit for borrowers, bridging loans need to be taken out responsibly and after careful thought.

Before taking out a bridging loan, carefully consider your options, compare options from more than one lender and ensure you have a solid repayment strategy in place.

What happens if I can’t sell my property in 12 months?

If you’ve taken out a loan over a 12 month term and subsequently fail to sell the property in that time, then you do still have options.

The first step is to reach out to your lender as the end of the term approaches. They will explain their stance should your term run over by a small amount (for example, while waiting for a buyer to complete their purchase).

If you don’t have a buyer on the horizon, then you can consider rebridging loans, these are bridging loans that are designed to specifically repay another bridging loan.

Of course, we are here to support you long after the loan has completed, so we’d be here to discuss your options, talk to your lender and to lend our experience in selling the property.

about-the-author-gary-hemming

About The Author

This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.

Gary Hemming CeMAP CeFA CeRGI CSP  -  
Commercial Lending Director

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