What is the Criteria for a Bridging Loan?
To qualify for a bridging loan, you need to have a strong exit strategy to prove you can access funds to repay the loan. Personal income is not considered by the lender. Additionally, you must be over 18 and residing in the UK.
Please note that the loan will be secured against one of your assets, usually a property. Failure to repay your debt could result in the repossession of the secured asset.
How Quickly Can You Get a Bridging Loan?
Bridging loans are designed for fast access to finance, often used to bridge the gap between buying a new property and selling an existing one, or for refinancing post-completion. We can expedite the process by providing independent legal advice quickly via video conference.
What Costs Are Involved with Bridging Loans?
Bridging loans, like any financial agreement, come with various costs beyond just the interest charges. Here are the primary expenses you should be aware of:
Arrangement Fees for Bridging Finance
Arrangement fees are paid to a broker or service to set up your bridging loan. Typically, these fees are a percentage of the loan amount, with 2% being standard. For larger loans, you might be able to negotiate a lower fee of around 1%.
Valuation Costs
When you use property as security for your bridging loan, a valuation is required. You will need to pay for a surveyor to conduct this valuation, either directly or through your lender. Sometimes, desktop valuations or recent valuations may be accepted. If you use multiple properties as security, each property will need a separate valuation.
Exit Administration Fees
Some lenders charge exit administration fees when you repay your bridging loan. These fees cover the administrative work required to remove the lender’s charge from your secured property. Exit fees are typically around 1% of the loan value.
Bridging Loan Solicitor Fees
Engaging experienced bridging loan solicitors incurs legal costs, which should be factored into your overall expenses. Even if you don’t hire a solicitor directly, the lender may charge you for their legal expenses as part of their due diligence process. Our costs start at £950+VAT and you can contact us for a quote HERE.
Can You Get Cheap Bridging Loans?
To find affordable bridging loans, it’s advisable to shop around and compare the rates and terms of various bridging lenders.
When Do You Repay the Bridging Loan?
Bridging loans are typically repaid quickly, often after the completion of a house purchase or other short-term financing needs.