Bridging Loans Sheffield

Whether you want to buy a new property or develop an existing one, you need to have the money for it in place and ready for when you need it.

Arranging traditional property finance can take a lot of time and energy. Mortgage applications from high-street banks or building societies take a few months to process.

You could have to wait weeks just to learn that your application was rejected, which is a lot of lost time in a market as fast-paced as the real estate market.

Bridging loans Sheffield offer an alternative option for financing your property transactions. Bridging finance is a form of short-term lending designed specifically to provide a short-term cash solution to those who need it.

The money bridges the gap between buying a new property and selling your old one, for example. You can secure a bridging loan against commercial property, residential property, a building plot, or land without planning permission.

Bridging loans offer:

  • Quick and effective short-term finance when you need it most
  • Flexible terms to suit your needs
  • Up to £25m in finance

You can use your bridging loan for property transactions, including:

  • Purchasing residential property
  • Completing a property purchase when there’s a break in the chain
  • Developing and refurbishing property
  • Downsizing
  • Buying property abroad
  • Buying property at auction
  • Extending your lease

Your bridging loan provider will want to know you plan on paying back the money. You’ll need an “exit plan” in place before they lend you money.

Perhaps you are planning to arrange a traditional long-term mortgage on the property you’re buying when you can. You could also be planning to pay back the loan using the money from selling your current house.

What matters is that you have the means to pay back the loan.


How do bridging loans work?

Lenders use bridging loans to cover financial gaps, such as a break in the property purchase chain.

These loans are handy when you need a temporary financial solution and can’t afford to wait for traditional loans or mortgages to process.

Depending on your circumstances, a bridging loan could be just what you need for your financial problems.

A bridging loan will generate monthly interest, but you don’t need to make monthly payments on it. Instead, you pay the full price of the loan plus interest at the end of the loan period.

This is why lenders require proof of your exit plan before lending money. Keep in mind that bridging loans are primarily a short-term financial solution. The loan period lasts an average of between 12 and 24 months.

The bridging loans market is a tough one to navigate by yourself. We recommend that you deal with a specialist broker who knows the ins and outs of the market to secure a quick and cost-effective deal on your loan.


Types of bridging loans

There are two varieties of bridging loans:


Open bridging loan

If you have found the ideal property and want to buy it, but you haven’t sold your current property yet, then you want an open bridging loan.

One downside of this loan type is that lenders are apprehensive about offering them. There is the chance the sale could fall through, meaning that the lender isn’t guaranteed to get their money back.

If you have a lot of equity in your current home, lenders will be more likely to offer you a loan on it.


Closed bridging loan

These loans are for those who have exchanged on a property and need some extra financial aid to secure the purchase and guarantee it goes ahead.

A closed bridging loan is easier to secure than an open one. By the time you qualify for a closed bridging loan, the property sale is all but guaranteed.

It’s unlikely that the lender won’t get their money back at this point. As such, they are more likely to lend it.


Secure a bridging loan today

If you’re buying property in Sheffield and aren’t sure about bridging finance or if it is the right option for you, then get in touch with us today to learn more.

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