Residential bridging finance
Bridging finance exists to plug the financial gap for property transactions. It is commonly used with property purchases such as:
- When a chain exists and the borrower wants to buy their next property before their existing one is sold.
- When a buyer is purchasing a property from an auction
- In any circumstance where the borrower needs access to rapid property finance, with the minimum of paperwork or hassle.
- Where a property needs refurbishment before being sold.
- Where a traditional mortgage cannot be taken out on a property, such as a property which is unfit for human habitation, pending remedial works.
Can I get a bridge loan if I have a CCJ?
Bridging loans don’t really work like they do in retail banking or with a personal mortgage whereby a decision is made solely on your personal credit history. Our panel of lenders tend to judge a client on their individual circumstances and, actually, it’s usually more important for you to be able to demonstrate a successful track record over a certain term.
Lenders will also sometimes ask for a business plan or a redemption plan that shows what you intend to do with the bridging loan and what the money will be spent on so that they can see if it fits their risk profile.
Ultimately, to get an affirmative application with a lender we recommend speaking to our team of experienced bridging finance brokers who can help you with all of this and assist you in putting together an affirmative plan that’s likely to be accepted.
Features of residential loans
How much can I borrow on a bridging loan
This will depend according to your circumstances and will be depending on a number of factors. Primarily lenders will want to know things like what your Gross Development Value (GDV) is, what the Loan To Value (LTV) percentage is as well as things like your credit past and your record with property development.
Typically, however, you can obtain fast bridging loans that would provide up to 70%-80% of the value of the property, and anywhere between £250,000 to £50,000,000 depending on the lender.
Bridging finance is usually offered from one month to 18 months. These are not long-term loans, such as a mortgage, and the short timescale is reflected in the higher interest rate.
Offered on an experience basis
Many bridging loans are offered on receipt of a business case, redemption plan or other types of evidence that show how the finance will be used, what the plan is to repay it and that the plan for doing so is workable and in line with the lender’s risk profile. For example, more experienced property developers will naturally be able to borrow larger bridging loans at short notice than a first-time auction buyer. Speak to your broker to present your case in the best possible way, so that lenders can offer you the best deal. At Hans Zarihs we do this for all of our clients so that they can receive the right bridging loan offers for their needs. We are always clear, transparent and helpful – providing tailored illustrations and all necessary information to help with decision-making. Whatever queries you might have, we are here to assist.
Asking where can I get a bridging loan? The answer is probably with a specialist provider, accessed via a broker. Most bridging finance is offered via specialist brokers who work with a panel of property-focused lenders. This is a niche product which tends to be used by more experienced and sophisticated borrowers who are either developing their own property through auction or refurbishment means, who want to build a property portfolio or who are expanding a portfolio using a range of financial tools. A specialist broker, such as Hans Zarihs, will provide:
- Access to a tried and tested panel of bridging finance lenders for bridging loans
- A rapid process with only a short form to receive initial quotes and offers
- Generous and flexible terms, designed around the customer
- A visible commitment to customer service
- Excellent reviews and a trusted track record.