Bridging finance

Bridging loans are short-term finance used to buy property. Typical reasons for this is speed of transaction or a property being  not mortgageable. These loans generally last 12 months.

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Bridging relies on an viable exit strategy to repay the loan within the loan term. This is usually done via releasing funds from a property such as a mortgage, remortgage, through sale of assets but is not completely restricted to these repayment methods.

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They have great flexibility and can save property transactions in many cases.

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These must be secured against a property or land that has planning permission upon it. They can be arranged much faster than standard mortgages, sometimes in a matters of days you will have the funds in your account. With mortgages it generally can take 3 months to have funds in your account.​

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Pros:

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• Can be arranged in under 72 hours in best case scenario

• Can be placed across multiple properties allowing LTV calculations to be lowered and loan sizes to be larger

• Loan can be based upon equity/deposit due to structuring of loan with no monthly repayments allowing no affordability assessment

• Can be used on properties that normally could not secure mortgage finance to buy property with increase value potential

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Cons:

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• Higher interest rate than mortgages

• Higher fees than mortgages

• Failure to repay the loan within timeframe can result in large penalties

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If you have a time sensitive deal or one needing aid in securing finance on a property that is currently run down to renovate then bridging finance could be a great solution.

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