Bridging finance has experienced huge growth year on year which is mainly due to a lack of appetite and the tightening of lending criteria by mainstream lenders. The bridging sector has ‘come of age’ over the past 24 months and has evolved into a versatile, flexible and innovative form of alternative finance. Lenders have diversified their product ranges to offer a suite of bridging products to cater for almost any scenario that requires short-term property backed finance. This, coupled with an influx of new lenders entering the market, an abundance of funding and a genuine appetite to fund deals have all resulted in increased competition amongst lenders and the lowest bridging rates the market has ever seen.
Bridging finance is a short term loan, secured against property or land and is used to “bridge” the gap, until longer term finance can be arranged or the underlying security is sold. The key to the success of a bridging loan is to ensure that a viable exit strategy is firmly in place upon application.
1st, 2nd and 3rd charge loans on any type of property including:
The lender is likely to charge a valuation fee and legal fees upfront. Costs will vary from lender to lender and will depend on the property purchase price or valuation. In addition, most lenders will charge an arrangement fee of somewhere between 1 – 2% of the loan advance. This is usually deducted from the loan advance on completion. There are usually no exit fees or redemption penalties, although a small number of lenders do still charge these. Exit fees are usually charged on development finance and can be based on the Gross Development Value (GDV) or end value of the project.
Bridging Finance is more expensive than conventional mortgage funding and is a short-term funding option. Therefore it is essential to establish a clear exit strategy to ensure the loan can be repaid (either via sale or remortgage) to avoid paying high penalty interest rates and possibly losing the home to repossession if the loan cannot be repaid.
Regulated bridging finance is where the borrower or a family member will reside in the subject property.
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You can now decide whether you prefer to manage the client’s application or to pass the name and contact details to us. Your dedicated case manager will guide you through the process either way.
If you would prefer to simply pass your client’s name and contact details to us, you can either:
a) Call our helpdesk on 01277 500 900 Option 3
b) Submit your clients details online at: www.easysource.co.uk by selecting ‘call my client’
Contact our Bridging Finance helpdesk today: