Bridging Loans are a unique type of property financing that help people bridge a financial gap.
These loans are usually short term and interest-only, and can be agreed on relatively short notice when the applicant has a deadline to meet, such as a closing date on a property. They are often used during the buying and selling of properties, especially during auctions, or refurbishment work.
Bridging Loans are given on the value of a property, and your ability to pay the loan back – the ‘exit strategy’. Your ability to repay monthly payments still matters, but is less important than for basic mortgages. This means a decision can be reached quickly and help you out in time-sensitive situations.
- Terms usually around 12 months to three years
- Can be first charge mortgage or second charge mortgage on top of a conventional mortgage
- LTV usually up to 75%
- But 100% LTV can be secured with additional security
- No early repayment fees
- An ‘exit strategy’ is a key aspect of Bridging Loans
In the this bridging loans section, we’ll go into a bit more details about the types of loans available from Residential Bridging to Bridge-to-Let loans.