Bridging Loan FAQs
Our expert team are here to answer all of your bridging loan queries.
Everything you need to know about bridging finance
Here are the most frequently asked bridging loan questions and their answers. We cover what they are, how they work and why you might want to consider them.
A short term, property backed loan used when a conventional mortgage is not appropriate or is not available within the required timescales.
Typical examples of use include buying at auction, carrying out refurbishments to property, dealing with a change in title and or a planning application.
Most loan periods will range between three and twelve months, though some providers will lend up to 24 months depending on your case strength.
The interest can either be serviced monthly, or the interest rolled up meaning no monthly repayment and full repayment is made at the end.
This is the method in which the loan will be paid off at the end of the term, normally through a sale or refinance arrangement.
The smallest loans generally begin at 100k but there is no maximum. What is available depends upon the asset, loan to value and exit route.
Offers can be provided in 24 hours, money in as little as 48 hours, but most deals typically see completion within 3-4 weeks.
Individuals, companies, LLPs, trusts and overseas entities.
Some do, others do not. If you have poor credit non-status lenders are available.
Yes, with some lenders available across parts of Western Europe also.
Yes, via the use of specialist lenders.
No, not if your exit strategy is to remortgage your existing loan. If your exit strategy is to sell, no mortgage DIP/AIP is required.
Property details, borrower details, valuation details, works program, credit history and exit strategy.
OMV is the open market value of a property; 180 day value is what a property would sell for on the assumption it needs to sell in less than 6 months (which many lenders factor into the risk calculation).
Yes. Some lenders will advance on OMV which works well with auctions or distressed property sales.
Yes. Bridging loans can be done in days to ensure you meet the 28 day purchase deadline of the auction.
Yes. Personal income will usually not be the deciding factor as interest can be rolled up.
Yes, providing the land has planning.
Typically none although a minimum term and sometimes an exit fee can apply.
Yes. Sometimes any unsatisfied CCJs may have to be settled by the borrower.
Yes, this can be achieved for LTD Co, LLP, Offshore structures and SIPP.
Yes once the minimum terms are satisfied. Retained interest that has not been used to fund the loan is refunded.
Generally around 30%, however, purchasing under value will lower this requirement and 100% funding is available in some circumstances.
Certain lenders do require experience at higher LTVs, however most are able to help with a first time investor.
A first charge is a primary security; a second charge may be added to the property if adequate equity exists.