Bridging Loans Coventry

One of the main problems with completing a property transaction is having the money in place when you need it. It can take several weeks, if not months, to process a traditional mortgage application.

Most banks also require a deposit of up to 25% of the value of the property. Even then, it can take weeks to find out your application was denied, putting you back at the start of the process.

A bridging loan could be the solution you need to your financial problems. Our trusted directory gives you access to many different providers so that you can find a bridging loan that is suitable for you.

As the name suggests, these loans “bridge” the gap between your current position and when you can secure permanent funding such as a mortgage.

Lenders can secure a bridging loan against residential property, commercial property, building plots, and empty plots of land of sufficient value.

Bridging loans offer:

• Between £50,000 – £25m in finance
• Fast short-term finance when you need it
• Flexible terms to suit your needs

 

What can bridging loans be used for?

Bridging loans can be used for several purposes, including:

• Downsizing
• Purchasing property
• Developing and refurbishing an existing property
• Buying property at auction
• Buying international property
• Extending a lease

 

During application, borrowers will be asked to offer the details of their exit plan. This is how they plan to pay off the loan when the time comes.

An example of an acceptable exit plan is to use the money from a property sale to pay the loan. There are many bridging finance products to suit various needs.

You should consider seeking professional help to find the right loan for your needs. Don’t hesitate to contact a bridging loan broker from our directory if you are considering a bridging loan in Coventry.

 

How much does a bridging loan cost?

Short-term borrowing like this is generally more expensive than long-term finance options such as mortgages. A bridging loan should only ever be seen as the means to an end.

You shouldn’t rely on bridging loans for anything but short-term finance. You might find that this isn’t the right financial solution for you after all.

As far as the costs and fees associated with bridging loans, lenders typically charge an arrangement fee of 2% of the total value of the loan. The fee is included in the total loan amount and is paid back when the loan term ends.

Bridging loans accrue monthly interest like any other kind of loan. The interest rate depends on the loan-to-value (LTV) rate, property location and type, and other factors.

Non-regulated bridging loans may come with an exit fee of between 1-2%. Even though bridging loans do generate interest, the interest is added to the total amount and paid back at the end of the loan term rather than on a monthly basis.

This means you don’t have to pay monthly interest on bridging loans. You will need to pay administration fees as the loan is secured against something else.

Lenders must hire solicitors to ensure that all legal conveyancing is done properly. Bridging loans have similar legal costs to standard mortgages.

If you – or the realtor – hire an independent surveyor then you’ll also have to cover those costs. Some bridging loans only charge interest for as long as you have the loan.

If you take out a 12-month loan but manage to pay it off after six months, you’ll only have six months of interest added to the total.

Others lenders may prevent you from paying a loan back early or insist that you pay the full amount if you do. Talk to the lender before signing anything to see how they handle early payment.

 

Talk to the bridging loan experts today

If you’re looking to complete property transactions in Coventry and need support, then please reach out to us to learn more about your needs.

Our directory of trusted bridging finance lenders can help connect you with a provider that suits your needs.

We always recommend trying a few different providers to get the best possible deal on your bridging loan in Coventry. If you would like help with calculating fees, then use our bridging loan calculator.