Bridging loans are a specialist form of finance which is for short term use, to provide a temporary cash flow or to ‘bridge the gap’ to when a long-term finance solution is secured.
Bridging loans can be used for a variety of reasons, the purpose of the required capital and/or the current state of the property will determine which below category the bridging loan falls into:
Standard bridging finance – This is where short term funds are required but no changes are required to the property and it is in a habitable condition. A scenario where standard bridging would be required is where you wish to purchase a new property prior to the sale of you existing property.
Light refurbishment: Where funds are required to be secured against a property where works are to be carried out, which does not require building regulations or planning permission to be in place. A scenario where a light refurbishment bridging loan would be suitable is where a traditional mortgage lender deems the property uninhabitable, and cosmetic work only is required to bring the property up to the required standards of the mortgage lender.
Heavy refurbishment – Where work is required the property which does require building regulations or planning permission to be in place. An example of this would be a loft conversion or a property extension.
Lenders apply a monthly rate of interest which can either be rolled up and added into the total amount to be repaid at the end of the loan or serviced monthly. Hope Mortgage Solutions can secure rates as low as 0.45% per month. A typical arrangement fee is 2%.
Hope Mortgage Solutions can get terms approved for short term finance in 48 hours, and in some cases an agreement in principle completed on the same day as your enquiry.
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