Purchase bridging loans

Why should I use this type of bridging loan?

Bridging loans serve as a short-term financing solution, a departure from the long-term commitments associated with mortgages, which typically span 20 to 35 years, reflective of their respective cost structures and interest rates. When speed is of the essence to acquire your dream property, or when the property is not ready for mortgaging as renovation is required, a bridging loan can be the right approach.

Benefits

• Relatively easy to arrange bridge loans: unlike the protracted process often associated with standard mortgages, bridging finance arrangements can be expedited significantly, with select lenders capable of processing applications and disbursing funds within a mere seven working days, contingent upon individual circumstances and eligibility criteria.

• Interest rate payments each month can be deferred. Bridging loans offer the flexibility of deferring monthly interest payments, allowing borrowers to 'roll up' interest to be settled at the term's conclusion, thus optimising available funds for property acquisition or renovation purposes.

• High LTV lending is available. The loan-to-value (LTV) ratio is another notable aspect, with most lenders willing to extend financing up to 75% LTV, while certain non-regulated property developer loans may reach up to 100% LTV, contingent on the specific circumstances and asset securities involved.

• Work out your exit route. However, the acquisition of bridging finance necessitates a well-defined exit strategy, ensuring a clear pathway for loan repayment at the term's conclusion, typically through property sales or long-term mortgage arrangements.

• No early repayment fees. An advantageous facet of bridging loans is the absence of early repayment fees commonly associated with long-term mortgages, offering borrowers the freedom to settle the loan ahead of schedule without incurring significant penalties, as bridging loans are tailored for short-term financial needs with flexible minimum terms, often as brief as one or three months. Additionally, interest is typically calculated solely on the duration the loan is outstanding, promoting cost-effectiveness and financial efficiency for borrowers.