FAQ

BRIDGING LOAN FAQ

Most frequent questions and answers

You can borrow a minimum of £10,000 for your bridging loan with no maximum amount capping your loan. The exact amount you can borrow depends on the property value you are securing the loan for, a quote will then be provided based on the loan to value (LTV) which ranges from 50-80% for LTV interest rates.

A closed bridge loan is very similar to a normal bridging loan, the only difference being that the lender will know how & when you will repay the loan. If you know you can repay your bridging loan by a certain date from the sale of a property or other means, then a closed bridging loan is perfect for you.

An open bridge loan has no fixed repayment date. There is no set exit date for an open bridging loan either as you can only guess how long the loan will be needed. This is perfect for someone waiting for a buyer or sale, the loan is then repaid when funds become available after the sale of a property.

Bridging loans are highly flexible with the type of security they accept from a borrower. Examples of security that your bridging loan can be secured against include residential property, commercial property, building plots, and land. We are also flexible about the type of construction and condition of the property.

As the loan period of bridging loans are short-term, you can pay interest in 3 ways:

Pay Interest Monthly – it’s not added to your bridging finance balance.

Rolled up – pay all interest in full at the end of your loan.

Retained – borrow the interest for an agreed period and pay it all back at the end of the loan.

We arrange bridging loans as first or second charge. When you take out a bridging loan, a charge is placed on the property you’re using as security which prioritises which lenders are repaid first if you fail to repay your loan – a first charge loan is paid first before a second charge loan.

If you own your property or you’re taking out a bridging loan to repay your mortgage, the bridging loan would be first charge, so your bridging loan would be repaid first.

If you already have a loan against the property, such as a mortgage, the bridging loan will be second charge, so if you fail with repayments, your mortgage would be paid off first.

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