Residential Bridging Loans & Buy to Let
Often our clients are keen to add a new property to their portfolio, but risk losing out on an opportunity whilst waiting for the lengthy bank approval application. This is where residential bridging loans can provide the perfect solution.
Bridging finance is a form of alternative finance that allows you to raise large sums of cash, fast – without going through a lengthy application process.
This allows buyers to react fast to property investment opportunities and acquire valuable assets for their portfolios, to refurbish and sell, or even to let.
Likewise, if you are a property investor applying for a loan, it can take a long time if you do not have the funds ready to purchase a property outright.
With our bridging finance you can purchase the property you have in mind promptly, while making other arrangements for the long-term financing of the asset.
What are residential bridging loans used for?
People use residential bridging loans for a variety of reasons, including:
- Buying a new property while awaiting completion of a sale
- Extending a lease
- Funding a refurbishment (light/medium)
- Property investment opportunities – including commercial properties
- Newly Converted Flats
- Extending a lease
- Standard Construction
- Property Acquisition
- Converted Flats
What are buy-to-let bridging loan used for?
There are many different reasons to why people use a bridging loan for buy-to-let properties, from the actual acquisition of the property to extending the lease.
- Refinance existing property portfolios
- Starting a property portfolio
- HMO properties
- New build property purchases
- Light development with intent to let
- Property Acquisition with intent to let
- Freehold/Leasehold extension
How much will I be able to borrow?
With our bespoke bridging loans, we look to tailor your MFS experience to suit your specific needs.
We therefore offer residential bridging loans from anywhere between £100,000 to £10 million*.
* We take each bridging loan case on their own merit; we can look to increase the maximum based on circumstances that meet our lending criteria and assets available.
Please see our criteria page for more information.
What do I need to prepare beforehand for a bridging loan?
Before we are able to offer a bridging loan, we need to complete a set of checks. This is standard practice, especially as we ensure all of our lending is completed responsibly. We can complete the checks quickly if all the documents required are readily available.
You may be required to prepare the following:
- Photo of the borrower’s passport
- Proof of address
- This can be a utility bill, a council tax statement or bank statement
- Underwriters will ask for these to clarify and confirm your identity
- They must all be clearly dated within the last 3 months
- Bank statements
- This is usually for the past 3 months, but on complex circumstances may require up to 6 months.
What can I use as an exit strategy?
There are many ways to repay a residential bridging loan, but the first thing to remember is not to panic.
We are here to help you every step of the way, including setting up a viable exit strategy that works to your time schedule.
Popular exit strategies include:
- Traditional long-term finance – e.g. Waiting for a mortgage
- Waiting for your current property’s sale to complete
- Refurbishing and reselling your asset for a profit
- Renting out the property and mortgaging
How much does a bridging loan cost?
This will depend on your bridging loan rate. Rates can vary due to a number of factors, a key influence being your LTV level. Our dedicated underwriters will use their expertise to assess the risks of your loan, calculating in all factors to ensure you receive the best rate, with a bespoke bridging loan tailored to your individual needs.
We know your time is precious, so we are upfront with our rates and decisions, with no hidden costs or added extra’s along the way, and when we say yes – we mean it.
How does a bridge loan work?
Bridging finance is provided by a bridge lender – like us – and is used when a borrower needs funds to cover a payment gap. As the lender, we help our client ‘bridge’ the gap by providing the difference.
What does LTV stand for?
LTV stands for Loan to Value. This is important to understand as it will affect the maximum loan value that you will be able to borrow against your property. It will be determined against your property’s current market value.
Our maximum LTV on a residential bridging loan is 75%, meaning you can borrow up to 75% of your assets current market value – depending on your situation. The LTV you require will affect the initial interest rate (as mentioned above) of your loan and can also impact the length of your bridging loan requirement.