Bridging is used as short-term finance for buying and refurbishing a property. With LTVs up to 80% at very competitive rates, bridging may be right for you if you are looking for a quick injection of capital.
Bridging loans are intended for shorter-term projects 3, 6,9,12, 18, and 24 months; for Acquisition, Add Value & Refinance. You can expect to pay between 1.25% to 1.67% interest per month, depending on various factors, including the size of the loan, loan-to-value (LTV), duration, experience, and the borrower's credit rating. We can Loan the money very quickly, but it tends to be more expensive than some other forms of funding.Bridging is a form of short-term finance secured against an asset, typically the property. It is used for a variety of different reasons, including:
Which are sometimes combined depending on the lender's and the borrower's circumstances.
The interest is deducted from the Gross Loan upfront. In this case, the borrowerdoes not need to make monthly repayments, and the capital is repaid at term.
The interest is added onto the loan and paid at the end. There are no monthlypayments, with both the capital and interest paid at term.
As with Term mortgages, serviced interest is paid off on a monthly basis, with thecapital repaid at term. This is the Primary method we loan by.
We can offer funding from £25k to £5m (and more when it comes to development finance).
The value of the property will affect how much you can borrow and the rates you will be charged. Most bridging lenders will loan up to 75% of the value of a property, known as the ‘loan-to-value’ or LTV. The higher the LTV the higher the interest rate. Some lenders can offer a higher LTV, but it’s unusual unless it’s development finance. While typically based on the lower of the purchase price versus the open market value, some bridging lenders will loan against the gross development value (GDV), but will charge a significant up-front Fee ; typically 1.5 to 2% or more
We will charge a minimum interest period of 3 months, although the loans themselves may last weeks only, but typically up to 6 to 18 months. If you exit the loan early, as long as you have paid the minimum interest, you not be charged an Early Termination Fee (ETF) Many other lenders charge exit fees!
There are only two options and the bridging lender will want to see that you have a clear exit strategy in mind:
Term investment mortgages will not allow improvement works. It is common for a bridging loan to be used to acquire and refurbish a property, before moving to a Term mortgage. We don’t offer long term Mortgages. But we will assist with “Letters of Comfort” to another Lender.
In addition to interest fees, there are also other facility costs that you need to be aware of. Arrangement Fee: to cover the paperwork and other disbursement costs. We charge a flat fee of £500Other Lenders typically charge around 2% of the value of the gross loan, forproviding the facility Legal Fees: You are expected to cover both your own and our legal fees. These are charged onthe time expended to complete the Facility Agreement & setting up Legal Chargeof the asset you offer as security. Which may be the Project Property or anotherAsset. Valuation Fees:We do not charge Valuation Fees; instead we do our own duediligants based on the information you provide us of the “SubJectPropery” Project. Or other Asset/property. This is included in ourArrangement Fee Other lenders typically charge fixed fee, paid to the Valuer chosen by the lenderdetermined by property value, starting from £400 + VAT.
Most BTL mortgages won't allow any significant refurbishment and need tenants in situ. If you need to renovate the property and want to save on paperwork and fees, a Bridge To Let may be more appropriate. This is a bridging loan and BTL mortgage rolled into one.
Bush Property Ltd is a Privately Owned Family Company. Reg: 06857600
The FCA does not regulate the forms of Business Commercial Mortgages to Limited Companies.
