Bridging Loans and Finance are a short to medium term solution for either a cash requirement or used to make a property purchase. Some reasons to use a bridging loan are as follows: Compare Bridging Loans With a Bridge financing Calculator

A Bridging Loan to buy a property.

This is the most common use for a bridging loan, to make a quick purchase on a property that you want to purchase, this is usually for when say you have found a property that you wish to make an offer on and buy before you have sold your current home, the fact is that an estate agent will not accept an offer on a property for sale until the person making the offer has a sale agreed or finance in place to complete the sale, this is where your bridging finance comes into play because with a bridging loan agreed the vendor and agent will accept an offer as in effect you already have a bridging loan in place, you are also as good as a cash buyer as you do not come with the baggage of a property chain that is dependant on the sale, so as such you are in a far better bargaining position with the vendor as they know you can complete the sale quickly. Property Chains in sales are fraught with danger and at anytime one of the buyers or sellers could change their mind or have a change in circumstance with puts the whole chain in jeopardy, when this happens often the only quick fix is to take out Bridging Finance to ensure the sales continue.

Buy a Property at Auction

Property Auctions are an excellent place to buy cheap properties, however, there are drawbacks if you are not a cash buyer you will need to get funding in place quickly as they will usually only allow up to 30 days for you to make payment in full, this will require a 10% deposit on the fall of the hammer with the balance within the 30-day timeframe, as it would be near impossible to arrange a mortgage in such a small time frame a bridging loan is the only realistic answer because they can be arranged in a very short time as little as 7 days then auction buyers use this type of funding until they have either sold the property on or refurbished and then raise a long-term mortgage on it.

A Bridging Loan to release equity from a property you own.

If you own a property or properties say in a buy to let portfolio, a commercial property or even just your own home, then the likelihood is that over the last few years you have built some equity in the property with property prices rising substantially throughout the UK in the last ten years many owners are sitting on cash that they sometimes need to access, this is one of the many uses bridging loans are taken out for, you can get up to 75% of the properties value less any outstanding mortgage on it, so if you own a property worth say £300k a bridging loan could be taken out at 75% so up to £225k although you would have to take off any other mortgage or loans that were outstanding on the property so in effect if you had a £100k mortgage then the bridge would be up to £125k, the reasons for releasing equity are many it could be to cover a debt that you unexpectedly get, general cash flow for your business or any other reason as long a the use is for legal purposes the lender will be happy for you to use the funds as you wish.

Bridging Finance & Loans Terms

Bridging Loans are for anything from one week up to as long as two years, however most are taken out for up to 12 months, they are really just a short-term mortgage that is secured against the property be that on a first or second charge basis, the lender relies on the equity that is in the property for their loan security, anything over 12 months would be considered a short-term mortgage.

Bridging Loans Type of Property I can borrow against.

Bridging Lenders will lend against any type of property and some even against other assets that are tangible such as shares art etc. However Property is the number one asset that is used to secure a loan, with the vast majority of these properties being residential, either houses or flats, you can get a secured loan against a commercial property, but most lenders like to stick with residential loans, we do however have a number of specialist lenders who will lend against all types of commercial and semi-commercial properties and this also includes land that has planning permission and also land that still has a value without planning permission.

Compare Bridging Finance Rates with 1st UK Finance

UK Bridging Loans are one of the UK’S leading bridging loan brokers and can search all of the loans on the market to source the perfect deal for your circumstances.

Contact us now to discuss your proposal and we can assure you of the very best advice and service, call us now 0800 138 6001 or use the contact form on this page to compare loans.