Using bridging finance is a common way to obtain finance in a short space of time and bypass the traditional delays associated with a mortgage application.
Tiger Financial is a whole of the market broker with access to competitive rates from across the industry – and whilst the criteria and loan terms may vary, the majority of bridging lenders we work with will request the following information below prior to funding your loan.
If you can provide the basic information and meet the criteria of the lender, they can typically provide you with up to 75% LTV of the property’s value. As an applicant, you should be looking to get an immediate ‘decision in principle’ which confirms in writing that the lender can offer you a loan with initial terms and will be able to proceed, subject to further checks such as property valuations and background checks.
Outline your plans
Most bridging cases are used for purchasing property within a short deadline, whether it is for buy-to-let, residential, commercial or development finance. The lenders we work with will routinely ask the purpose of your loan and what plans you have in mind.
Providing a brief breakdown of your plans can be very useful. It does not need to be a sophisticated business plan, but something that shows a level of preparation and due diligence including
· The value of the property you are securing the loan against
· The amount of funding you require
· How long you require finance for
· Costs of any building or construction work you require
· Confirmation that there is no subsidence, asbestos or other barriers
Tiger Financial caters to customers looking for bridging finance in London, the UK and Scotland – and we do not support enquiries in Ireland.
Planning your exit
Bridging lenders always need to consider how the customer intends to repay their loan, otherwise known as their exit route. With the typical bridging loan running from 3 to 12 months, will this timescale be sufficient to refurbish their property and resell it or will they be looking to refinance it at the end of the loan term? Exit routes include:
· Property or asset sales
· Receipt of money owed
· Policy reaching maturity
Details about you
As the applicant, a bridging lender will require some basic information about and ways they can contact you moving forward.
• Full name
• Date of birth
• Current address
• Your living status – owner-occupier/tenant/living with friends or family
• Your income
• Employment status and details i.e self-employed, limited company, partnership, offshore company.
• Do you have any other owned properties?
• Do you have clean credit?
• Do you have experience?
Your property information
The property is where the value is for the lender since your loan will need to be secured against some form of property. The bridging lender and the borrower (you), will enter into an agreement upon completing the loan and the loans provider will be able to take ownership or repossess the property if the loan is not repaid on time.
The property used in the loan agreement could be to purchase your own property by way of the first charge or using a bridging loan in order to buy another property by way of the second or third charge. It could also be a plot of land, your work premises, a storefront, offices, hotel, petrol garages, farmhouse, leisure park and more.
Further documentation required
To confirm your identity and information about your property, the lender may request further documentation or proof including:
• Proof of ID and address
• An asset and liabilities statement
• An AIP for the follow on the mortgage (if refinancing)
• Your property portfolio (if you have one)
• Development appraisal and schedule of the work you wish to carry out
• Your bank statements from the last three month
• Your business or development CV
• Copy of your credit report
Does the lender run a credit check?
For regulated loans, the lender will usually conduct a credit check as this is a pre-requisite of the Financial Conduct Authority. For Tiger Financial that deals in the unregulated bridging market, credit checks are not always required and the lenders we work with are sometimes willing to take a view on adverse credit histories and histories of defaults, arrears and CCJs. This is otherwise known as ‘non-status lending’ and will instead consider the value of the property and its potential, rather than your credit history.
Tiger Financial is dedicated to guiding you through the bridging loan application process and getting you the best deal possible, by covering the entire bridging market. For more information, contact us today.