Bridging loans are a short term finance solution, designed to help you complete your purchase on a new property before selling your existing home. Bridging loans also help you to finance the swift purchase of land for development.
Bridging Loans can be arranged for either residential, commercial or semi commercial property purchases or remortgages, with some bridging lenders covering both and others specialising in one or the other.
Bridging Loans in UK are usually used as an interim financing measure until permanent or ‘next stage’ financing is obtained. For example, the sale of an existing residential property may take longer than the required purchase deadline of a new property, bridging finance could therefore be used to bridge the period of time until your existing property is sold, at which point you may have the funds to pay off the bridging loan in full with the property sale proceeds or to use as a deposit to complete on a standard mortgage.
Typically they are arranged quickly with little documentation, and with the underwriting criteria being more relaxed than the usual type of secured lending such as a standard mortgage, most lenders are not interested so much in you but the security and the exit. The benefits mean you can purchase an auction property within the 28 days deadline or negotiate a good deal on a property based on the fact you can complete quickly. With the process being much quicker than a typical mortgage and non status funds are released fast, such rates are higher than traditional mortgages.
Standard terms vary from lender to lender, but in general bridging finance is usually available for a period of between 1 and 24 months. It is sometimes possible to agree an extension beyond 24 months in some circumstances, but generally speaking bridging loans are meant as a short term financing measure, lasting months not a few years.
Instead of going to every lender on the market, just come to us, we do all the hard work for you. We have relationships with all the major lenders and private funders and speak directly to decision makers.
Please visit our Bridging Loan Rates page to check out what rates are available.