Bridging Finance

Honest and straight forward bridging finance solutions that we’re proud of

When it comes to Bridging Finance, you definitily want an experienced and an honest mortgage broker.

Having a mortgage broker who has broad experience in the residential and buy to let sectors really helps you plan and implement your exit strategy.

We don’t just look at a bridging mortgage case in isolation, without due dilligence of your wider plans to help ensure the whole process runs smoothly.

Common Bridging Finance Mortgage Questions

When it comes to getting bridging finance for some it can seem a bit scary, but if planned correctly, it won’t be.

There are lots of promises made and broken in this sector. But we’ll always tell you the things you really need to know up front, so you don’t have any of those surprises.

Do you have a question about bridging finance?
If you have a question about bridging finance that is not covered here, please contact us.
How does a bridging loan work?
A bridging loan is just like a regualr mortgage. In fact it is a mortgage if it is secured on a property!

The term ‘bridging’ is used as it describes the fact it is an interim form of finance until either permanent financing is in place or an exit strategy (i.e. selling) takes place.

Bridging loans are very fast to get compared to a typical mortgage and has huge advantsges when speed is important.

Typically briging loans are used for:

  • For properties which are unmortgageable until works have been carried out.
  • To buy a property without having to sell first. This can be for both residential and investment type propeties.
  • For development finance.
  • For auction properties where you have to complete in a very short time.

If you need to chat to see what is best for you, please reach out to us and speak to one of our experienced bridging loan brokers.

What is a bridging loan?
A bridging loan can seem scary, but its really no different to any other type of mortgage. It is just an interim form of finance until something more permanant has been arranged.

The difference between a bridging loan and a typical mortgage, is that it is specifically designed to have for a shorter period of time compared to a tradiotnal mortgage.

This is fine provided there is a clear plan and strategy. Not that you could, but clearly a bridging loan for 12 months would not be apropriate for a first time buyer buying their first home.

Equally a developer, or someone buying at auction who needs finance quickly, intends to turn around a projectc quickly and move on, is unlikely to want to be tied into a mortgage for 30 years, with penalties to pay off early.

Its all about the context of your plans and making sure the finance is suitable for whatever you are planning.

How long can you have a bridging loan for?
A bridging loan is usually set up for a term of 12 months, however it is possible to have a shorter or longer term, depending on your circumstances and the lender.

If a bridging loan term is set up for a term of 12 months, you can of course redeem it early. The whole point of a bridging loan is to repay before the end of the term.

If it is likely that your plans will be longer it is either advisable to get this agreed at the outset, or go with a lender who is likely to be flexible if you find you can’t redeem the bridging loan in time. Some lenders are much more flexible than others.

How much does a bridging loan cost?
A bridging loan can have multiple pricing points.

Most bridging lenders charge a lender fee of around 2% of the loan amount which you can usually add to the loan.

Some lenders will charge a valuation fee, while others won’t.

Lenders will also charge you their legal fees which will be in the range of £1,000 to £1,500 but of course it could be more depending on what exactly you are doing.

Some lenders will have an exit fee. In other words when you repay the bridging loan they will also charge you for the pleasure.

Lenders may also have additional fees and costs to cover various scenarios.

The trick is to always look very closely at the fine print to see what you are signing up to, before you commit to anything.

At Barr Financial we only work with bridging loan lenders who we know well and have a good relationship with. There are a lot of new and untested brdiging loan lenders popping up and it is important to always work with a partner who has a good and realiable reputation.

What interest rates for Bridging loans
Bridging loan pricing is not as transparent as other mortgage products. As a result it is common to see prices quoted at very low levels, but later when the deal is progressiing discover the lender finds a reasons not to give you the ‘headline rate’ but offer something else! At which point it is too late or will take too long to find an alternative deal.

At Barr Financial we only work with bridging firms who we know and are honest and transparent. When it comes to brdgign loans we know its critical to work with good and relaible lenders. A realistic cost for bridging finance is around 1% per month but it can be higher if there is more risk involved.

How long does it take to get a bridging loan?
We have managed to secure a bridging loan in 9 working days from the date of first inquiry to funds being in the clients bank account. A bridging loan is a very fast way to raise finance. The speed is completely dependent on everyone in the process moving quicky.

The process generally invloves these key elements:

Initial assessment and documentation.

Research and submission of your application.

Assessesment by the lender.

Some form of valuation / property assessment.

Legal work.

Bridging Finance Repayment Calculator

Bridging Finance Guides

Why Is It Better To Put Down A Bigger Deposit?

What is a bridging loan?

Service that’s about smiles not sales

We may be mortgage brokers, but we’re not a bunch of bankers! We are independent which means we only work for you. Our team are incentivised not on sales, but providing the best service for you.

FIND OUT MORE ABOUT US

Our Success Rates

( First quarter 2018 )

%

Research

  • We assess
  • You instruct us
  • We research
  • We find the best deal for you

%

Agreement In Principle

  • You agree to the deal
  • We submit the first stage of your application
  • You get an agreement in principle

%

Mortgage Offer

  • We submit the second stage of your application
  • We present your application in the best possible manner
  • They assess your situation
  • We support you throughout the process
  • They assess your property
  • You receive your mortgage offer

%

Completion

  • Technically our job is done but we also like to help
  • We liaise with solicitors and estate agents
  • We keep you updated
  • You achieve your goals
Talk to the Bridging Finance mortgage experts

Call us on (01237) 472321

or enquire now

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