BRIDGING LOAN QUOTE
ENQUIRE TO GET A QUOTE OR USE OUR BRIDGING LOAN CALCULATOR TO WORK OUT INTEREST & REPAYMENTS
BRIDGING LOAN CALCULATOR
This bridging finance calculator is for bridging loans where the security property is a residential property that is not regulated by the Financial Conduct Authority (FCA), such as a buy to let, an HMO, or a permitted development scheme where the planning consent has already been granted for the conversion of the property being used as security to residential.
*For commercial bridging loans, please contact us for your bridging finance quote.
What Bridging Loan To Value Can I Expect
The bridging loan to value (LTV) and monthly interest rate will be dependent on the property value, type of security property, the location, the credit profile of the borrower, and how much experience the client has.
The bridging loan calculator is designed to provide an accurate guide to the overall cost of a bridging loan facility if it runs full term. However, the interest charged will be less if you redeem the loan before the full term, with loan interest calculated on redemption based on how long you had the bridge loan for.
Note: the figures generated should not be relied upon. Please contact us at any time and we will be pleased to provide you with a detailed accurate quote and loan approval.
WHAT ADDITIONAL BRIDGING LOAN FEES AND COSTS ARE THERE
For all bridging loan applications, there will be a number of professional fees that you will need to be aware of and budget for. Some of these fees are not fixed, so the lender will provide a quote at the appropriate time.
- Arrangement fee: typically 2% of the bridging loan amount. This lender fee will be deducted from the gross loan on completion.
- Broker fee: not always charged for straightforward residential bridging loans. However, when charged, it is typically 1%, which is also deducted from the gross loan amount on completion. Note, Tiger do not usually charge an assessment fee.
- Admin fees: these are additional fees charged by the lender Usually deducted from the gross loan, with one or two exceptions. The amount varies.
- Legal fees: the borrower will be liable for their own legal fees and that of the lender. In some cases, dual representation can be used, which helps reduce the fee amount. These fees are usually payable in advance by way of a legal undertaking.
- Valuation fees: a valuation is required for most bridge loans, except for a few specialist bridging loan lenders when lending against good security properties and good clients at quite low LTV's. The amount charged is dependent on the property value, type of property, location, and whether any work is being done. The valuation fee is usually payable in advance.
- Quantity surveyor: when borrowing for property development or heavy refurbishment, the lending company may require a quantity surveyor report or a monitoring surveyor initial report to ensure the estimated build costs are accurate. The fee will be determined by the market value of the property and the amount of work being done to the security property.
- Supplementary professional reports: if the valuer finds any areas of concern such as Japanese Knotweed, asbestos, subsidence, damp or structural problems, then they may require a specialist to analyze the problem and provide a quote for any remedial works. In this case, the client would also be liable for the specialist report.
- Exit fees: not always charged, but will need to be accounted for when calculating the redemption amount on settlement of the outstanding loan balance.
HOW DO I GET APPROVED FOR A BRIDGING LOAN?
Please see below for the most common bridging finance criteria:
- Bridging loans from £50,000 to £100 million+
- Loan term from 1 month to 24 months
Bridging finance available throughout the UK and Western Europe.
- Borrowers must be between 21 and 75
UK and overseas residents welcome
- First and second charge bridging loans available
- All property types
- Credit History – CCJs, defaults and arrears are considered and usually accepted provided the bridging loan exit is not dependent on refinancing
- No income proof required – except when the loan is to be repaid through refinancing or when the borrower is planning to service the monthly interest
- Bridging loans are available to individuals, partnerships and limited companies
HOW BRIDGING LOAN INTEREST IS CALCULATED
The bridging loan calculator provides a detailed breakdown of the monthly interest rate charges, including the arrangement fee/facility fee amount and any broker fees or exit fee if charged. The net loan amount will be dependent on the bridging loan product and the monthly interest rate charged. Typically, the bridging loan interest and arrangement fee will be deducted from the gross loan amount, which will leave you with a net bridging loan figure. However, for some refurbishment bridging loans, the lender will allow the monthly interest to be added to the net loan amount, although the facility fee and broker fee will still be deducted from the gross loan amount.
Bridging finance lenders have different ways of calculating and charging interest. However, in the majority of cases the interest is retained. For example:
- Property market value: £500,000
- Bridging Loan LTV: 75%
- Term: 12 months
- Gross loan amount: £375,000
- Interest charge: 0.75% per month
- Interest amount: £2,812.5 per month
- Total interest: £33,750
- Facility fee @2%: £7,500
- Day one net loan: £333,750
Settlement amount if loan kept for 6 months:
- £333,750 + 6 months interest = £350,625
When using a bridging loan to refurbish a residential property, there are some lenders who will allow the monthly interest to be added to the loan, which is useful if the net loan amount required needs to be increased.
What is the difference between a Mortgage & Bridging Loan?
A bridging loan is a short term finance option that is used when a regular mortgage would either not be available or not the best option. The bridging loan rates tend to be slightly higher than a mortgage but may work out cheaper in the long run once early repayment charges (ERC’s) are taken into account.
A BRIDGING LOAN CAN BE USED WHEN:
- Buying under value property from an LPA Receiver
- When you require short term finance to apply for planning permission
- When buying at auction so need to complete within 28 days
- Borrowing against value not purchase price
- If you want to refurbish the property to then sell or refinance
- Buying with a deferred consideration when the net loan amount is not enough.
- If the property is uninhabitable or requires refurbishment.
- You wish to split the title
- When conventional credit is refused
- You need working capital
- You want no monthly payments or the interest to be added to the loan
- When you need money urgently.
HOW DO I GET APPROVED FOR A BRIDGING LOAN?
- Houses, flats, maisonettes, bungalows and HMOs
- Commercial property can be used if it is being converted to 1 or more residential properties, such as an office with permitted development rights.
- Multiple security properties can be used for the property loan
- Bridging finance is available in both the UK and Western Europe.
- Bridging loans are available on properties that would not be eligible for a mortgage.
- Bridging loans can be used to refinance partially completed buildings, as long as they are wind and water tight.
DO I NEED TO GET A VALUATION
RICS Red Book Valuations are required for most property finance lenders. However, in certain circumstances, when the underlying property asset is strong and the loan is a low loan to value, some specialist lenders will not require a valuation, but will either rely on their internal asset manager or will use an AVM – or “Automated Valuation Model” – otherwise known as a desktop valuation.
Tiger Financial Ltd is a financial services company registered in England no: 10225910. Tiger Financial Ltd is directly authorised and regulated by the Financial Conduct Authority (FCA) no 915106. The FCA does not regulate all mortgage or bridging loan products. Think carefully before securing debts against your home. Your home could be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Data Protection No ZA470485