Bridging Loans and Bridging Finance

Bridging Loans and Bridging Finance

Bridging Loans and Bridging Finance are simply secured loans used to bridge the difference between a deposit and the sum of money you would have otherwise covered with existing cash reserves or a mortgage that hasn’t quite cleared yet on a short-term basis. Bridging Loans are commonly used by purchasers of Auction Property, Land Acquisitions (most lenders would require planning to have been granted on the Land) or purchasing a Buy-to Let Property. Though Bridging Loans are generally seen as a convenient alternative to conventional forms of borrowing, a few key points need to be kept in mind –

1) It is expensive – from arrangement fees to monthly interest payments, bridging loans tend to be far more expensive than conventional mortgages from high street lenders.

2) Complicated – The conveyancing transaction surrounding a Bridging Loan from your initial instruction to successfully bringing it to completioncan beand is very complicated. It is therefore crucialto instruct a competent and experienced Conveyancing Solicitor from the start.

3) Understanding how the Lender will deal with the Interest Payments – Unlike conventional mortgages, Lenders (depending on their exposure) will either offer rolled upor retained interest(we will briefly describe the difference between the two below)

Are you looking for a Bridging Loan or Lender who can act with speed at competitive Interest rates? Contact our New Business Team on 0203 375 2187 today to discuss how our Partner Bridging Lenders can assist you NOW.

 

How much can I usually borrow with a bridging loan?

How much you can borrow as always depends on the purpose of the Bridging Loan, the type of security you can give the Lender and the duration of the loan. Most Purchasers use a Bridging Loan facility to buy and complete on a transaction prior to selling their existing Property or their investments. Typically, the Loan to Value variesbetween 60% of the value of the Property on Commercial Properties to 75% in some instances on Residential Property acquisitions.

Bridging loans are aimed at Clients who require access to funds quickly but at a premium interest rate ranging from 0.9% a month to 3%. Since speed is of the essence, at Express Conveyancing, we can source you a Bridging Loan Lender fit for your requirements and also appoint an experienced and specialist Bridging Loan Conveyancer at an affordable price. You will also be required to cover the Lender’s legal costs and survey fees (this is not uncommon even when you are obtaining a conventional mortgage however the costs are more expensive).

It is also worth noting, as we have briefly touched earlier on this article, that theLender’soffer willeither offer to/give the option to eitherretain or roll up the interest. If the Lender retains interest, then a basic example isas follows –

Borrowing – £100,000

Term 12 months

Monthly Interest – 1.25%

Total Interest over the 12 months – 1.25% x 12 x £100,000 = £15,000

Arrangement Fees plus costs – circa £5,000

Therefore, the NET Loan you will receive will be circa £80,000

If the Lender allows you to pay the Interest on a rolled up basis, your NET Loan amount will be £95,000 however at the end of the term, you will be required to pay back £95,000 + £15,000 + exit costs.

Most Lenders operate a ‘Retained Interest’ Policy to minimise their exposure.

Express Conveyancing are a specialist Conveyancing Panel Management Company and Bridging Loan broker dealing with hundreds of similar transactions a month. As our name suggests, all our systems, people and infrastructure are geared to ensuring your transaction completes as quickly as possible. If you have a requirement for Bridging Finance or a Conveyancer to deal with a Bridging Loan facility, contact our New Business Team today on 0203 375 2187 or using the Contact Us form.

What our clients say

Great value for money. Everything went smoothly and I was very pleased with the service provided
Rachel Whitfield
Rachel Whitfield
20:59 12 Oct 18
Excellent! Very responsive, and really helped to push the purchase. There were unexpected delays during the process, but Anthony really helped to reassure me that he was doing everything he could to progress the sale. Ultimately, it all worked out in the end, and I would highly recommend! I would also recommend for auction purposes.
Sean Stevens
Sean Stevens
09:14 21 May 18
Very happy customer. Understanding of our needs and recommended a really fantastic solicitor.
Jack Hearne
Jack Hearne
17:49 12 Oct 18
I have just completed the purchase of my flat with them. They were recommend by the estates agents Phillip Arnold and they were fantastic. My case was handled by Milena who was really helpful and always available on the phone. The online system is also really easy to use. If I buy or sell a property I will definitely be using them again.
Sharon Kelly
Sharon Kelly
18:27 20 Dec 17
I used this service following a recommendation. The online case tracker worked really well. I would recommend this service as it's vital in the coordination between Estate Agencies and between Solicitors. The service proved invaluable in helping progress the conveyancing work efficiently and effectively. Completed the transaction just before Christmas having instructed the Solicitors on the 4th.
Shelly Harrill
Shelly Harrill
16:30 19 Dec 17
Excellent Service. Final Price same as quoted.
A Google User
A Google User
14:26 19 Dec 18
Have used them twice. Both times completion happened in less than 4 weeks, even over Xmas! Totally amazing. They take the stress out of the whole process.
Daniel West
Daniel West
13:04 21 Dec 18
Excellent Service. Final Price same as quoted
Parsa Khamooshi
Parsa Khamooshi
15:54 21 Dec 18
Being a first time buyer they guided me smoothly through the whole process of moving into my first home. Very professional and economical.
Uday Seth
Uday Seth
12:31 24 Dec 18
Express Conveyancing have been excellent in the handling of my recent house sale and purchase. Would highly recommend
James Ellis
James Ellis
11:43 30 Apr 19
Express Conveyancing have been excellent in the handling of my recent house sale and purchase. Would highly recommend
Michelle Preston
Michelle Preston
12:20 30 Apr 19
ThanksThanks for handling my sale and purchase. No complaints from me. Rebecca was regularly on hand to help with my queries and deal with issues.
Claire Miles
Claire Miles
17:48 07 May 19
I bought my first home in South London with Express Conveyancing . Great professional service, I was regularly updated and looked after. Top marks, 100% recommendation from me!
Dale Griffiths
Dale Griffiths
15:58 02 May 19
Good service and happy with the conveyancer
Chris Jenkins
Chris Jenkins
22:01 17 May 19
Great service from start to finish. Was great being able to see progress online! Very quick and efficient! All staff were helpful. Highly recommend
Reece Moseley
Reece Moseley
06:20 30 May 19
I would highly recommend them. They deal with any queries promptly and efficiently. Would definitely use them again.
Sahar Dalini
Sahar Dalini
09:13 10 Jun 19
Fair prices good efficient service
Sue Batchelor
Sue Batchelor
18:46 01 Jun 19
I would highly recommend them. They deal with any queries promptly and efficiently. Would definitely use them again.
Sahar Dalini
Sahar Dalini
09:14 10 Jun 19

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