What is a bridging loan?
Bridging loans are generally a tool for short-term funding that can be often used to complete a fast purchase or to refinance an existing asset, usually a home.
We understand that it is important to make quick turnarounds and our team of experts will use their lenders network to find the best offer available to you.
What is the difference between a Bridging Loan and a Business Loan?
A bridge loan is a short-term loan used to bridge the difference between when cash is needed and when it can secure a long-term loan.
Property owners who need short-term financing to pay for one property while waiting for another to be sold may use bridge financing.
Business loans may be either short-term or long-term, but they also have a lengthy waiting period. The banks spend far more time reviewing your credit history and background, even before taking your loan application into consideration.
First vs Second Charge Bridging Loan
A first charge Bridging Loan means that there is no unpaid mortgage debt to be charged on the property and the house is held outright without loans being secured against it. A second charge bridging loan is a short-term lending product which is secured against a property that already has a mortgage outstanding. A second charge could allow for more flexible repayment terms, which could potentially save thousands of pounds in interest. An increasing number of people in need of extra funds are turning to second charge loans or bridging loans to purchase investment properties, inject capital into businesses, or make refurbishments in order to prevent disturbing their existing attractive mortgages.
What is an open bridging loan?
An open bridging loan gives you the flexibility of completely repaying the loan when you are finished, according to the actual terms of the loan. This may work well for a project that comes with no set date of completion.
What is a closed bridging loan?
A closed bridging loan is one where the lender knows how you will pay back the loan and at what date you can do this. If you know that you can pay back the loan from the sale of a property and have a completion date for the sale, then a closed bridging loan will be suitable.
When you apply for a closed bridge, you agree to reimburse the bridging loan by a set date. This is a perfect way to purchase something like a house with a negotiated date of completion.
What are the Term Lengths for a Bridge Loan?
A bridge loan is a short-term facility, by nature, between 1 day and 12 months. However, most bridging lenders give maturities up to 18 months (max. 12 months for limited bridge loans). Some lenders also provide up to 36 months of short-term credit facilities.
Why use Bridging Finance?
Bridging financing allows you greater negotiating leverage when acquiring a new home. You can collect the funds you need to buy your dream home right after it comes on the market before selling your current one, or quickly fix a problem with minimal disruption in the property chain.
Who are bridging loans for?
Bridging loans are most widely used by lenders, developers of properties and buyers to purchase a property while waiting for the sale of an already existing property. These forms of loans are often used more frequently nowadays by wealthy individuals who want to benefit from a quick form of financing while purchasing residential or Buy To Let properties
When Should You Use a Bridging Loan?
Borrowers are increasingly using bridging loans alongside longer-term loans as a supporting form of financing. Ideally, this method of financing will be used to bridge the gap between where funding is required and when sufficient funding can be obtained.
What is the typical interest rate for a Bridge loan?
A bridge loan’s average interest rate ranges from 0.43% -2.5% percent per month. These figures are only an indication and can be more or less depending on the bridging loan deal
What kind of fees are involved in a Bridging loan?
- Fees for processing: Typically, approx. 1-2 % of the amount borrowed.
- Interest for the month: 1 %.
- Exit charges: Approx. One or two %.
- Brokerage fee: 1 % or more when the loan has completed.
- Other costs to be told include legal fees, appraisal fees and VAT.
What are the eligibility criteria for a Bridging Loan?
Bridging borrowers typically need immovable collateral. Loans may be based on one property value or several cumulative property values.
The lender and the borrower enter into a contract whereby if the loan is not repaid as agreed, the service provider takes ownership of the land. Eligibility varies from lender to lender.
What is a Bridging Loan Broker?
A broker is a bridge between your bridging loan target and the investor who will give you the loan.
In the case of a bridging loan, factors such as the protection provided, the maximum loan, adjustments due to the contents of the survey report, and legal issues are also resolved. A bridging loan broker will work with you to ensure you are not confused when it comes to dealing with people who have more business expertise than you.
Bridging loan broker vs. Bridging loan marketplace
If you are searching for a bridging loan from a reliable lender, a broker would be able to check the market to find you the best terms available to suit your needs.
They will negotiate the best deals with lenders on your behalf when contrasting those figures with several other top providers; the goal is to get the right deal for you.
In addition, a broker will help you decide if a bridging loan is the best option for your circumstances.
On the other hand, the online bridging marketplace provides a forum to access bridging loans for individuals and organisations. It is a kind of comparison platform where most alternative financing providers, loans, and other financial products give you some comprehensive funding choices.
Why should I use a Bridge loan Broker?
One of the key benefits of using a bridge loan like us is its wide variety of options. We have access to a wide variety of bridge loan products so choosing the right one for you is much easier.
The expertise we have as a broker, and the large network to which we have access, means that you can see the best and most appropriate loan products available. Bridging lenders typically tend to work with professional brokers who can determine a loan proposal ‘s viability and a loan exit strategy.
How could working with a Bridging loan broker benefit you?
Although a general business loan might not be the answer for everybody, a good bridging loan broker would be able to consider the particular circumstances when looking for credit options that work for you.
If your application is delayed for whatever cause, it can be pursued by a good bridging finance broker on your behalf, speed up the application, try to smooth out any kinks and try to ensure you get your money when you need them.
How does getting a Bridging Loan Through a Broker Work?
If you want a bridging loan broker to help you process your application for a bridging loan, the broker must first research your circumstances to decide if a bridging loan is the best option for you. If so, the broker should provide guidance and advice, so you do not make a mistake with the method of bridging the loan.
At Mortgage Saving Experts, we are also trying to scan the industry of bridging loans in a bid to find and offer a loan deal that is right for you.
In a bid to get a lender willing to accept your loan application, our brokers undertake to submit your bridging loan application to several lenders. This has a remarkable advantage in that you have the right to select a supplier and a rate of loan that fits your financial circumstances.
What are the costs/fees of using a Bridge Loan Broker?
Bridging interest rates in finance can vary greatly depending on your situation; there are many factors that influence the cost of bridging finance, such as the amount of deposit you are looking to put down or the loan amount size.
Any related costs that you should be aware of include a surveyor valuation chargeabnd solicitors fees to name a few.
You should also be informed that we would charge a broker fee but how much this would be depends on a few factors and we are also given a commission by the lender.
We Offer Brokerage Services for These Different Types of Bridging Loans
Short-term Bridging Loans
Short-term bridging loans can be a lifeline for companies, creditors, property developers and even individuals when it comes to fulfilling financial obligations. But for every case that isn’t necessarily the right option. We aim to provide expert advice and help you find appropriate short-term bridge loans to help you make the right decision; get in contact with our experts at 01273 738072 or firstname.lastname@example.org.
We strive to work on your behalf efficiently and quickly, because we understand that speed and communication are important to you. You don’t have to pursue the lender or other people associated with a broker who looks after your best interests.
Property Bridging Loans
We aim to provide you with exclusive rates, bridging loans and property bridging financing that best suit your needs.
Our finance experts specialise in credit-bridging and understanding property financing and growth. Invariably our customers feel better because they know they can rely on us and our common sense approach.
Development Bridging Loans
If you have a project finance issue you should seek investing for the short term. We are a regulated financial broker and plan to deliver the best prices for construction bridge financing to property developers and homeowners in the UK.
As a bridging loan broker, we aim to spend the time required to better understand your business plan and financing needs and seek to use this unique insight to find appropriate development loans for your particular needs.
Auctions Bridging Loans
If you need to complete a real estate deal fast, you can rely on a bridging finance broker to find the right loans for you. We are working with a number of bridge financing providers and are looking to incorporate a range of scenarios including quick turnaround time auction purchases. Our auction bridging finance team will help you secure your purchase within your closing period of 28 days, as long as you can fulfil the requirements of the lender.
You have access to help with our more than 5 years of experience in auction financing, while other brokers with less experience sometimes cannot provide the same degree of assistance. We are proud to take a fair approach to any application for auction funding where our clients are at the forefront of our decision making.
Large Bridging Loans
Our specialist team brings tremendous experience in the management of significant bridging loans. If you are searching for bridging or construction financing for sums over 5 million, finding a lender to partner with you may be more difficult.
Our team has gained access to the UK market as a whole. Contact us to discuss your position and see if you are qualified to apply.
Why Choose us as your Bridging Loan Broker?
Unsecured loans available
We search for lenders who might be able to offer unsecured auction bridging loans for people who need such funding.
The qualification for a bridging loan depends mainly on exit strength. If yours is viable you have already won half the fight. From there you just need to think about finding the best offers.
No early repayment fees
Unlike other mortgages or other secured loan items, there’s no early repayment fees for the vast majority of borrowers we deal with. If, however, there is a penalty for early repayment, you will be notified on requesting a particular product in advance.
Stellar Customer Service
We are committed to meeting the highest customer satisfaction requirements. We aspire to treat all clients equally and give our individual attention to each customer.
We aim to offer the best financial advice and highest customer service levels. Look no further than Mortgage Saving Experts if you want a broker you can feel at ease with.
You ‘re in the right hands with access to the best bridging loan rates and programmes that allow us to provide affordable, quick UK property term finance.
Rather than going to some lender in the market, just come to us and we will do all the hard work for you. We have relationships with all big lenders and private lenders, and we can talk to policy makers directly.
If you meet the lender requirements and pass the verification process, funds can typically be issued within three to 30 days.
Flexible or fixed term payments
Since the loans we arrange are totally versatile and customised to your unique situation, you can repay them at any time. You may choose a flexible payment schedule or choose a fixed payment plan. We have lenders who can cater for either alternative.
We are the broker you should work with if you are looking for a fast and fair decision on a bridging loan product and want to prevent delays along the way. We try to go out of the way to find suitable lenders who will research the situation of your loan and make a fast and fair decision.
We are Easy to Work With
It’s always a pleasure to work with customers and to offer a complete, professional service to our clients.
For many years, we have been in the bridging finance industry; this means we have built up good relationships with some of the industry’s major players and lenders.
Transparency Every Step of the Way
Mortgage Saving Experts is a fully autonomous organisation, adopting the formal guidelines of the FCA. We are committed to consistency, accountability, and impartial counselling. As part of our commitment to accountability, we are only dealing with bridging borrowers whose terms, fees and rates from the outset are absolutely transparent.
Dedicated Account Executives
Weather you need an unsecured or secured bridging loan, we are working to find the best personalised solution to meet all of your financial needs.
With professional guidance, integrity and a committed adviser, our goods and services come along. If you would like to explore the available financing options for your company, please contact us today.
How does the application process for a Bridging Loan work?
Step 1: Fill out the application form and send the documents in question.
Phase 2: We will evaluate your personal circumstances to ascertain them.
Step 3: We will then provide the lender with all the details required for the credit risk evaluation and approval.
Phase 4: To ensure that the debt is secured, the properties used as collateral for the loan must be appraised.
Phase 5: If everything stacks up, you will receive an offer from the lender or lenders.
How to apply online for one of our Bridging Loans
The quickest way is to give us a call so we can go through your info and sort the deal as quickly as you like
Want to Check your Eligibility Before you Apply for a Bridging Loan?
We don’t believe in making it hard for our customers. We never did. For this purpose, we have developed an adequacy test system that you can use to verify how eligible you are before applying for a bridging loan. This is simply by calling one of our advisers who will ask a few simple questions to check your eligibility
Bridging Loans FAQs:
Can you arrange bridging loans for limited companies and partnerships?
Are bridging loans available for property investors?
Can I use property that already has a mortgage secured on it as security for my bridging loan?
Can I apply for additional finance once my original bridging loan is in place?
Are there any upfront fees to pay when applying for a Bridging Loan?
Are there any early repayment charges on my Bridging Loan?
Once I have my bridging loan, if I require more funds will I be able to borrow more?
Once I have my bridging loan, can I make capital reductions?
What is the difference between a bridging loan and development finance?
In essence they are both first charge loans secured on a property and both vary in price dramatically but are very similar in price in terms of interest rates depending on your circumstances
What is a buy to let mortgage?
LIBOR interest rates explained
The LIBOR is the rate of interest at which banks borrow from each other. This rate is set every 3 months.
What is rolled-up interest?
Can I use a bridging loan to buy a residential property for myself?
Can I get a bridging loan if I have bad credit?
Can you arrange bridging loans for people with County Court Judgements, defaults, and arrears?
What documents do I need to support my application for a bridging loan?
How are loan-to-value rates calculated in a bridging loan?
How quickly will the money be in my account?
Can I repay the bridging loan early?
What happens if I need additional finance?
Is there a limit to the number of bridging loans I can apply for?
Do I have to be a homeowner to get a bridging loan?
Do I need a 1st charge or 2nd charge loan?
Obtaining a first charge bridging loan may not be financially beneficial for a borrower. We will look at all types of lending to ascertain if a bridging loan is right for you first.
Second charge prices usually appear to be higher, but that doesn’t mean you can’t find the best price for you.
How much does a bridging loan cost?
How easy is it to get a bridging loan?
How much can I borrow for a bridging loan?
How does a bridging home loan work?
How long can you have a bridging loan for?
How is a bridging loan calculated?
Is bridging finance a good idea?
What is bridge financing for a mortgage?
Is bridging finance available if I do not have any income?
Does a bridging loan affect your credit score?
What Is A Regulated Bridging Loan?
What are the Advantages and disadvantages of a bridging loan?
- Sometimes available to clients with poor credit history
- Allows the purchasing of a property rapidly when the long-term financing is being carried out
- Will fund auction purchases without delay
- Even more flexible than having financial support from existing lenders
- You can take out a bridging loan within 4 – 6 weeks
Although bridging loans may be the ideal fast solution to cash-flow problems, they do have some disadvantages:
- They can be very costly – average rates differ between 0.43 and 2.5% depending on the lender.
- Related charges may apply
- The loan remains unpaid for each month, and attracts compound interest