Bridging Loans Nottingham
We offer advice on bridging loans in Nottingham and the surrounding areas. There’s never been a better time to invest in Nottingham property.
A bridging loan can help you secure your new Nottingham property by giving you the money you need when you need it.
What is a bridging loan?
At Bridging Loan Directory, we know everything there is to know about bridging finance. To put it simply, bridging loans are a form of short-term mortgage that lasts for up to one year rather than taking nearly a lifetime to repay.
These loans help to bridge the gap as borrowers secure long-term permanent financial solutions such as a mortgage.
A bridging loan application processes in a matter of days rather than months, giving you the chance to secure a purchase before anyone else and have more leverage at the bargaining table.
Lenders offer similar amounts to mortgages with bridging loans, but with a differently structured lending period. A bridging loan generates monthly interest over annual interest as they are typically paid back within one year.
Some loans also generate daily interest. For example, if you paid back the loan two weeks into the second month, you would pay one month and two weeks of interest rather than two months of interest.
Another key difference between bridging loans and other loans is the need for an exit plan. The exit plan outlines how a borrower plans to pay the loan back on time.
The more secure the exit plan, the more likely a loan request gets approved. The exit plan can be refinancing a loan with a traditional mortgage or money made from selling property.
The advantages of using a bridging loan
- Bridging loan applications are processed much faster than standard mortgages – typically within a few days instead of a few months
- Loans are secured against the value of the property rather than personal credit scores. This means bridging finance is open to low-income earners and people with a poor credit history.
- The interest on a bridging loan is “rolled up,” meaning that everything is paid back at the end of the loan term. This helps those who are already making monthly payments on bills and mortgages.
- Borrowers can arrange loan terms that suit their needs. An experienced mortgage broker will always suggest you borrow for as long as possible to account for potential delays, but there’s nothing stopping you from paying a bridging loan back early.
- Bridging finance comes with a generous loan-to-value (LTV) percentage. Most lenders offer up to 75% LTV with loans while some go as high as 80%. Having so much of the money you need gives you more leverage when purchasing property in Nottingham.
What are bridging loans for?
Bridging loans are available for several purposes, including:
- Renovating property
- Buying a new property
- Making a down—payment at a property auction
- Extending a lease
- Finalizing property transactions
Types of bridging loans
Bridging loans come in two forms; open bridging loans and closed bridging loans.
Open bridging loans
This type of loan is for those who have found a property they want to buy but are yet to sell their current property.
These loans are tougher to find and secure because of the potential that the current home may never sell. Having more equity in the home improves your odds of a successful application.
Closed bridging loans
This type of loan is for people who have already exchanged on a property and need some extra finance to secure the deal.
These bridging loans are easier to find as lenders assume that the sale isn’t likely to fall through by this stage of the deal.
Is a bridging loan right for you?
Anyone living in Nottingham or considering moving here must be wondering if a bridging loan is right for them. The truth is that these loans aren’t for everyone.
However, they are ideal for anyone who needs short-term finance in a hurry and doesn’t want to wait – or can’t wait – for a mortgage application to process.
Please ensure that you get the right deal for yourself when taking out a loan. For more information, Contact us or view our directory of trusted lenders to find a bridging loan suited to you/
We always recommend trying a few different providers to get the best possible deal on your bridging loan in Nottingham. If you would like help with calculating fees, then use our bridging loan calculator.