A bridge over troubled waters?

Bridging, its one of those things that people stuggle to understand how it works. 

 

Simply put, one of it's benefits is that it can be used as a mortgage for an unmortgagable property! 

 

If you are not able to put a mortgage on a property, but with a bit of work the property could be bought up to scratch, then you can bridge the gap between now and then! 

 

Bridge loans are usually for 3-12 months and it gives you time to get the works done. 

 

You can then refinance for the full market value and potentially gain a lot of equity in the meantime, which you could then pull back out to cover your renovation costs. 

 

Bridge loans are based on the initial sale price and are usually around 65% LTV once your fees etc have been calculated, however, we can also arrange for 85% Gross / 72% Net loans too. 

 

Most bridge loans are not monthly paid.serviced, but 'rolledup', where the interest is calculated on X months and paid up front. This then allows you to not worry about amonthly payment when your outgoings are being spent on repairs etc. 

 

Rate wise, they are charged monthly and are based on the amount of wrk to be done as well as the LTV requested, but there are usually around the 0.7% to 1.2% 

 

Bridges are sometimes seen as expensive, but this is due to people being misinformed that any property can be mortgaged in any state. 

 

Bridges are also often used for auction properties as they are able to facilitate lending very quickly, usually less than a month, where mortgage lending is often around 3-6 months. It allows for a property to be bought quickly and then updated and refinanced to a higher level asap. 

 

Until you have a lot of spare liquid funds, this is the best way to buy and refinance, or buy to flip. 

 

Some lenders even offer bridge to let products where you bridge and then when the work is done, refinance in house to a standard mortgage. These can be very helpful if the property has had a lot of work done or its a bit quirky. 

 

Every quote is bespoke, so get in touch and see what you can achieve using the bridge loan. 

 

Want to know more? Contact nme, Austyn, at austyn@hdconsultants.net