What is your bridging loans service?
- We will provide you with your own dedicated bridging loans adviser
- We will find out exactly what you need
- We’ll decide what is the cheapest way to borrow the money you need i.e. is there a cheaper way than using bridging loans?
- If bridging loans are the best solution, we will contact the entire marketplace to find the best lender for you
- When you’re happy to proceed, we will complete all the paperwork the lender needs for you. Decisions can often be made in two hours
- We guarantee the best rates.
Can you help me with bridging loans finance?
Yes we can. If you have any questions about bridging loans, contact us at Worldwide to speak to your dedicated independent business finance adviser. We will be happy to help you and initial consultations are free of charge or obligation.
Our Fee Guarantee: You won’t pay any fees unless we can help you.
What are bridging loans?
Bridging loans are short term loans secured on land or property to bridge a financial ‘gap’. For example, you may want to buy a new property but have not yet sold your current property to fund the purchase. The main reason for taking out a bridging loan is the need to move quickly with a purchase when you don’t have time to complete fast enough on a normal mortgage.
Bridging loans come in two forms – a ‘closed’ bridge and an ‘open’ bridge. A closed bridge is used when your house sale is guaranteed, and an open bridge is used when there is less of a guarantee. The terms of the loan usually last from between a day to a year, although the average term of a bridging loan is three months and there is usually a minimum period.
How much do bridging loans cost?
Bridging loans usually have an arrangement fee which can be from 0.5 to 1.5% of the loan. Interest rates are usually fixed as a percentage of the overall value of the loan. Interest is charged monthly, so the sooner you can repay the loan the better.
Other costs for you to consider will be valuation fees, lender’s arrangement fees, solicitor’s fees and exit fees. The lender will also charge monthly administration fees. There may occasionally be application fees and if you require the money very quickly, you may have to pay extra for this. So be sure to budget for that.
Who provides bridging loans?
A number of high street banks offer bridging loans; however, they may sometimes be a bit tight with their lending restrictions. Apart from the high street lenders, there are specialist lenders who may be able to deal more quickly with the process and also are much more flexible in their terms and can look at your business with a more open approach. It always pays to play lenders off against each other. We can do all of this for you.
How much can I borrow?
Most lenders will lend between 65 and 75 % loan to value (LTV). However, in some circumstances, if you have the required security, you may be able to borrow 100% LTV with some bridging loans.
Are there restrictions on who can take out bridging loans?
Bridging lenders will look at all applications including people who are self-employed. Even if you have a poor credit rating, you are likely to be considered. If this is the case, however, you will probably have to pay more.
What would I have to use as security?
Lenders will accept residential freehold and leasehold property, commercial property and land as security, as long as it is in the UK. If land or property has an existing charge against it, perhaps with a first mortgage, the bridging lender will place a second charge against it.
Be aware that some first mortgage lenders will object to a second charge, so always check existing mortgage paperwork carefully.
What other options are available instead of bridging loans?
There are a range of other options that you can consider instead of bridging loans. We can help you find the right one for you. Always consider every other option before taking out a bridging loan and make sure you’re absolutely certain of being able to pay the debt off.
Some of the alternative options you might consider are:
- You may be able to take out a standard no-fee mortgage with no early repayment charges
- You could remortgage your existing property
- You could let out your property using a buy to let deal.
Should I expect to pay more for bridging loans than any other business finance?
Not necessarily; however, because of the risk and speed you should expect to pay 2 or 3% more than usual business finance. Interest rates are wide-ranging and we can advise you on this.
Call your FT award winning independent financial adviser in confidence now on 0800 0112825 or complete the contact form and your dedicated adviser will contact you.
