What is a bridging loan?
Bridging finance was designed to allow consumers to close on a new property acquisition before selling their present house; it is a short-term finance that is repaid when the existing property is sold. However, bridging finance has now evolved into much more.
While it may still be used to ‘bridge’ the gap between selling and acquiring a new home, it can also be used to fund a wide range of projects, from renovations and conversions to more sophisticated projects.
Bridging finance today has limitless applications for financing where traditional lenders would not lend.
Bridging with Veracity Financial Planning
As independent advisers, we are able to source deals using the whole of the market, this means we aren’t restricted to using particular lenders. We have a network of over 500 lenders, ranging from high street lenders, challenger banks and private lenders.
Having an unrestricted panel of lenders to work with gives us access to the cheapest deals on the market and allows us to work with lenders that provide better-suited deals to each of our client’s unique circumstances. The cheapest deal isn’t always the best!
We advise both homeowners and property investors, in Nottingham and the East Midlands on bridging loans and set up the best bridging finance deals on their behalf.
All our advisers are experienced in their field and have the relevant qualifications to provide our clients with an extra layer of trust.
Can I use a bridging loan to do a refurbishment?
A refurbishment bridging loan can be used to purchase and refurbish a property. Usually, lenders will provide some funds to cover part of the purchase and some or all the refurbishment costs.
For investors looking to refinance the property after the refurb, we can arrange a buy-to-let mortgage to release some equity tied up for future projects.
Alternatively, you could sell the refurbished property to draw out any profits.
When do you need bridging finance?
Bridging finance is appropriate for many situations, including:
- You want to purchase a new property but haven’t sold your current one.
- Financing un-mortgageable or complex title properties.
- You have a time-sensitive situation and want funding immediately.
- High-street lenders will not help you.
- Need money to refurbish a house to sell or refinance.
- You require a development exit strategy.
- You want to purchase a property at auction. – Read more on Auction Finance
What are the benefits of bridging finance?
Obtaining the funds, you want with bridging finance can be extremely quick and efficient. In fact, the loan could be paid out in a week. When compared to the months it could take to raise a traditional loan or mortgage; it’s clear to see why people in a hurry are turning to bridging loans.
Limitless potential applications
Most traditional banks and lenders are quite explicit about what they are and are not prepared to examine when approving loan applications. A bridging loan, on the other hand, can be utilised for almost any purpose.
Relaxed lending criteria
The vast majority of bridging loans are secured by a valuable asset, generally a home or property of some form. As a result, the rest of the ‘standard’ lending criteria are rendered outdated. Credit ratings, proof of income, present financial situation, and so on are irrelevant if you can put up the appropriate collateral.
Bridging loans for foreign nationals:
Whilst it can be difficult to get a mortgage from a high street lender as a foreign national or an expat, bridging lenders are a lot less restrictive. As long as the bridge is being used for an investment property lenders are relatively unphased by lending to foreign nationals, even if they have no UK credit footprint.
Rates may be higher as the lender is taking added risk but there is a large market for lending to foreign investors.
To discuss foreign national bridging loans with a qualified adviser, contact us here.
Are you interested in bridging finance?
Veracity Financial Planning are expert independent financial advisers in Nottingham and the East Midlands. We understand our clients’ unique circumstances and find bespoke solutions to arrange the best deals on the market.
If you are looking for bridging finance, please contact one of our financial advisers today.