BRIDGING LOANS & DEVELOPER LOANS
NEED BRIDGING LOANS OR SHORT TERM FINANCE?
THINKING OF DEVELOPING PROPERTY OR BUILDING YOUR OWN? LET US HELP YOU WITH BRIDGING LOANS.
Want the best Bridging Loans?
Bridging loans are a short term loan usually with a term up to 12 – 24 months. They are short term loans that are used as a temporary bridge to purchase or re-mortgage a property that can’t be mortgaged with a conventional mortgage straight away. They are often used for quick purchases such as at an Auction as they can be offered more quickly that a conventional mortgage. They are also used to purchase properties that are un-mortgageable by conventional lenders, for example to purchase properties that are not in a good state of repair or may not have a kitchen or bathroom.
Here at the Mortgage Advice Center, we’ll help you sort a bridging loan or short term finance as fast as possible so you can get on with making your property your own.
What is a Bridging Loan?
A bridging loan is secured against a property and are short term in nature (up to 2 years) . They help to “bridge” the gap between say selling a new home and buying a new home, or developing a home to make it mortgageable. As they are short term loans (often less than a year) the loans are charged on a monthly interest rate. This interest rate can often be rolled up onto the loan so you don’t have to make monthly payments although the whole loan plus interest will have to repaid at the tend of the term.
You can usually borrow up to 75% of the value of the property. Bridging loans can be taken out on a first or second charge basis A first charge basis would be assuming there wasn’t another mortgage on the property . A second charge basis would be if there was already an existing mortgage.
What are Bridging Loans used for?
There are quite a few reasons for a bridging loan to be used :
- In situations where people would like to buy a property but are waiting for the sale of their property
- To quickly purchase a property for example if a chain was to break.
- To buy and refurbish a property
- To buy a property that needs to be completed quickly
- To purchase a property at auction
- Divorce settlements
- To quickly release cash through temporary funding
- Paying tax such as IHT or probate issues
What about Development Loans?
Whilst Development loans are similar to bridging loans, they are specifically tailored to the unique needs of property developers and are structured differently from traditional mortgage loans. A development loan is a type of financing specifically designed to support the construction or renovation of real estate projects. Property developers often require significant upfront capital to acquire land, finance construction costs, and cover other expenses related to the development process. Development loans provide the necessary funds to undertake these projects.
Here at The Mortgage Advice Center, we have extensive experience in helping property developers with Development Loans. Talk to us today so you can get your property project started.
What kind of Fees are involved?
There would be other associated costs with a bridging loan such as arrangement fees and valuation fees and maybe solicitor fees although some lenders have in house solicitors. There are various offerings of bridging loans dependent on what you require: Speed of completion, cheapest , longest term , type of security.
Our advisers will be able to talk you through the process and help you devise the correct strategy to take out the loan and to repay the loan at the end of the term. We are very experienced in this type of contract so can make you aware of what to consider and will also make sure that we can do all that we can do to ensure that in your current situation that you are able to pay off the loan with a realistic repayment strategy. Often, we would be required to do an Agreement In Principal with a mortgage lender to make sure that you are able to re-mortgage off the loan if this is the route that you are using. We are able to obtain quick quotes to enable you to quickly see if a project is achievable.
Property Developer Finance
Are you looking for funding for a new build, renovation or part-build? Here at the Mortgage Advice Center, we help property developers find suitable finance to get their projects off the ground.
Currently, we are able to obtain funding for up to 60% of the Gross Development Value and 70% of the total build costs. Lenders will want to see a commitment from the borrower with the lender usually providing the build costs.
Speak to one of advisers to get an idea of how much you are able to borrow.
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