We’re so excited to put our Bridge Fusion product to use! It’s truly unique, designed to be a hybrid between short-term bridging loans and longer-term BTL mortgages – combining the best of both worlds. This two-year tracker loan, with an annual interest rate, provides borrowers with a product that enables them to wait out uncertainty and instability in the market. It’s also possible to extend the loan for a 3rd year, where needed and appropriate.
Of course, as it’s so innovative and unique, many will likely be keen to get a bit more insight on exactly how it could be used. On that, our chief mortgage officer, Mike Cook, detailed the circumstances in which an investor may benefit from this product, and how it could work in practice.
“Simply put, Bridge Fusion is designed for borrowers who prefer to take a medium-term ‘wait and see’ approach; they are optimistic on future interest rates and want to wait before committing to long term lending on bigger loans,” he said.
“Compared to our standard bridges, Fusion rates can be lower when your client wants to borrow for a longer period and have the ability to request a 12-month extension (rather than 3) beyond the initial 2 years.
“Ideal, for example, if private or corporate banking arrangements are not quite in place. It keeps bridge flexibility, breadth, and processes, and is ideal for larger commercial or residential properties to £20m that cannot be accommodated on our buy-to-let range.
“Unlike our bridge range, it borrows the deferred interest feature of buy-to-let, which can improve cashflow and increase loan size by reducing serviced interest payments by paying up to 2% of interest upon redemption.”
Of course, whether our Fusion product is the best option available will depend on the individual borrower and their circumstances. It may prove to be the best option, but there are still scenarios in which one of our more standard products may be more appropriate. To provide an idea of the type of investor who could be suited for a Fusion loan, Mike profiled what a typical client may look like.
“It’s important to clarify that this product is not suitable for those needing short-term finance. It is most cost-effective when the term extends beyond 20 months.
“Having said that, a Fusion loan could be particularly useful for those in need of a particularly large purchase or injection of capital.
“Examples may include first-time commercial landlords, large scale renovation projects that are expected to take longer to complete, or those growing/establishing a business in a vacant property to then gain access in future to corporate or private bank financing.”
We’re only scratching the surface here of how this product can be utilised. To fully get to grips with how we may be able to help your clients, reach out to us today to discuss the details.
