As well as helping you find competitive mortgages, insurance and other financial products from our leading panel of providers, we also specialise in a unique product called bridging loans.
What is a bridging loan?
A bridging loan, or bridging finance as it’s also known, is a short-term funding option that is used to ‘bridge’ the gap between a payment going out and money coming in. Bridging loans are designed to help people complete the purchase of a property that would otherwise not be possible. For example, if a family wants to buy a new home before the sale of their existing property has gone through, they might choose to use bridging finance to ‘bridge’ the short-term shortfall in their finances.
Alternatively, bridging loans can be used to access a short-term loan, for what can be relatively large amounts of money, in a range of pressing circumstances.
What type of borrowers use bridging loans?
Bridging loans are predominantly used by landlords and property developers, particularly those buying a commercial or residential property at auction. In this case, the property will need to be paid for in full within a short space of time. The bridging loan allows landlords and developers to complete the purchase while they put mortgage arrangements in place.
- Ltd company loans
- Employed, self-employed or retired
- NO age restrictions
Given the banks’ current reluctance to lend, some borrowers are also using bridging finance as an alternative to mainstream lending. Although a bridging loan can represent a viable alternative in certain circumstances, borrowers should be aware that interest rates can be high and substantial administration fees may be added on top. For this reason it’s essential you plan your exit strategy carefully, i.e. know exactly how you’re going to repay the loan.
Where can you find a bridging loan?
Bridging lenders come in all shapes and sizes. Due to the sheer number of options out there, it is advisable to contact an FCA-regulated broker. At Just Mortgage Brokers, we know which lenders to approach to find the most competitive deal given a particular set of circumstances. We will also be able to advise you as to whether alternative finance sources might represent a more affordable option.
Get in touch with our specialist team today to see if a bridging loan is right for you.