Get Best Mortgage Deals
We have access to over 70+ different mortgage lenders,
Get expert advice from Visionary Finance
A bridge loan is a short-term financing solution. Bridging loans allow buyers to ‘bridge the gap’ in their finances to secure the money needed for purchasing a home.
Bridge loans are typically used for purchasing a property or land with planning permission. The difference in these purchases is that speed is of the essence. Hence the short-term loan to maximise funds.
They are most frequently used when buyers need additional funds than what they have available to complete on their purchase. For example, a buyer looking to purchase a highly sought-after property that requires a quick completion will typically opt for a bridging loan because of the flexibility and speed at which funds can be released.
Another example of where bridging loans would be suitable would be when the property being purchased isn’t in a habitable state and therefore the buyer is looking to renovate the property.
Bridge loans could potentially be used for:
Bridge loan costs can vary from client to client. As a rule of thumb, you will be expected to pay:
The amount of interest you will be expected to pay on your bridge loan is down to various factors. This includes:
The idea with a bridge loan is that you are borrowing the money on a short-term basis. The interest rates are generally higher than what you would expect on a mortgage because they give you flexibility.
In general, lenders offer loans ranging from £50,000 to £10 million. Your lending capacity will be dependent on criteria set by the lender. Much like a mortgage, lenders will test the affordability, serviceability, and viability of the loan. It will depend on your credit, the value of the property you’re using as a security and how you plan to exit the bridging loan.
If you have found a property that you need additional funds for with a short time scale, contact us. Our team of experienced mortgage advisers will be able to help you. Get in touch today for your free initial consultation.