How Much Can I Borrow When Taking Out A Regulated Bridging Loan?
Regulated bridging finance tends to be restricted to a maximum of 70% loan to value (LTV), although up to 100% funding is possible with additional security.
We can arrange loans from £25,000, with no strict maximum loan. We have funders in place who can fund very large loans on a case by case basis.
How Much Does A Regulated Bridging Loan Cost?
There are many bridging finance lenders out there, all of whom price their loans differently. We can secure regulated bridging finance from 0.49% per month for loans of £25,000+ and 0.48% per month for loans over £250,000.
On top of the monthly interest rate, most lenders will charge an arrangement fee of between 1-3%, although this is usually 2%. In some cases, an exit fee will also be charged, although this is becoming increasingly rare.
We always scour the whole market on your behalf to secure you the best possible regulated bridging finance rates. We will always look to offer rates as close to the market leading rates mentioned above as possible.
How Long Will My Application Take to Complete?
Where completion is required in a very tight deadline, a regulated bridging loan would be used to ensure the property isn’t remarketed due to the delays. This would stop the client from losing out on the property.
We can fund regulated bridging loans on the same day under extreme circumstances. Generally, it is realistic to expect your loan to complete in 5-14 days.
What Does ‘Regulated’ Mean & How Does This Affect Me?
The term regulated when discussing bridging loans means that the loan is regulated by the Financial Conduct Authority (FCA).
The FCA are a regulator for financial services and aims to protect consumers, enhance the integrity of the industry and promote competition in the interests of consumers.
All of this means that when taking a regulated bridging loan, you are subject to a higher level of protection from unscrupulous lending practices.
Regulated Bridging Loan Uses
As with other types of bridging loan, there are numerous uses for regulated loans. One of the most common uses is people who are looking to purchase a property before their current property is sold.
This differs from unregulated applications, which are more commonly associated with auction purchases and refurbishment projects.
Of course, this is not exhaustive, and regulated bridging finance can be used for almost any purpose.
What Are The Differences Between Regulated & Unregulated Bridging Loans?
Regulated bridging loan applications are subject to tighter rules than unregulated applications. The maximum loan to value is restricted to 75%, whereas unregulated loans can be taken up to 80%.
What To Expect When Applying For Regulated Bridging Finance
When applying for regulated finance, you can expect a detailed discussion around your current circumstances and what it is that you’re trying to achieve.
Without doing this, it’s impossible to know whether this type of loan is the right option for you.
As these loans are more expensive than many other types of secured borrowing, it’s important that you get this right.
Is The Process More Difficult Than Unregulated Bridging Loans?
There may be additional information required and some checks may be more stringent than unregulated applications.
It’s important to remember that these checks are designed to protect you and they work well.
Some applicants are tempted to say that they will not be living in the subject property to benefit from simpler criteria.
This is a bad idea as it will reduce your rights and will put you at risk of repossession should this come to light after completion of your loan.