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Bridging loans: Frequently Asked Questions

Bridging loans can prove very useful to those that are not able or willing to go for a traditional mortgage loan for residential or commercial purposes, and those that need to get a property loan quickly and with minimal fuss so that they do not lose out on the property that they have their eye on. Below are some frequently asked questions and answers relating to bridging loans.

How long will the application process take?

With a traditional mortgage the application process can be a very lengthy and frustrating one. However, the application process with bridging loans can be far quicker. Of course, a lot of this will be down to how quickly you act in terms of providing the details required to get your applications processed with maximum speed.

How much will I be able to borrow?

You can borrow up to seventy five percent of the market value of the property in most cases, which is beneficial because the LTV is based on the market value of the property rather than the purchase price. If you are therefore able to knock down the price from the seller your LTV will end up being even higher. Typical loans start at £50,000.

What if I have poor credit?

You can still get a bridging loan if you have an adverse credit history, although you may have to pay a higher percentage of interest on the loan. You can even use a bridging loan to help repair your credit if you have had arrears.

What if I need to borrow 100 percent?

A 100 percent loan can be considered if you have additional assets that can be used as security, as the deposit can then be secured against the additional assets, enabling you to effectively borrow the full amount that you need.

Do I need to prove my income?

If you are not able to prove your income then you don't need to worry, as you can opt for a non-status loan where there is no need to prove your income.

Am I able to take out a loan to pay off another bridging loan?

Yes, this is something that can be arranged and at very reasonable rates and repayment terms. Bear in mind that not all lenders are able to do this.

What sort of security can I use?

There are many types of security that can be used to get the funding that you need. Finance can be obtained for properties that are in a poor state of repair, land that comes with or without planning, blocks of flats, houses, commercial properties, hotels, pubs, and more.