Bridge loan, development, and commercial financing offerings include a wide range of unique and special offerings.
1st Choice Mortgages has arranged short-term bridge and development loans in all regions of the UK. Also, we can provide bridging loans to buy real estate abroad. Most importantly, experienced, consistently talented best bridging loan brokers are available.
We hope these bridge loan FAQs will serve as a starting point, but things can be very complicated. Therefore, we always recommend you check with your FCA-registered broker for complete advice.
Here are some frequently asked questions on bridging loan
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Can you get a bridging loan if you don’t own a property.?
You may be the first purchaser. As expected, benefits are available if you have some experience. However, Cross Charge can release equity if you own more than one property. Bridging lenders also look at your wealth, income, and experience to assist each applicant.
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How long can I have a bridging loan for.?
The industry-standard term for bridge loans is approximately 6/7 months. However, bridging loans can be arranged from 1 day to 12 months. Under certain circumstances, it is possible to agree on a more extended period of 18 months or more.
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Can I still obtain a bridging loan if I have credit issues.?
Bridging finance is usually adamant about the security of the offered property and the exit route. Therefore, credit issues should not be a problem as long as the selected lender is happy with the answers to these two points. It is important to note that the exit route for this scenario is usually a sale, as refinancing a customer with credit problems with a bridge loan is very rare.
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How much deposit do I need to finance a bridging loan.?
Each bridge lender sets a maximum limit on the deposit or capital of the asset used as collateral. It is usually in the range of 25% to 40%. In most cases, the applicant chooses to deduct the fee from this number, and usually, the prepaid interest payments are ahead of time. Therefore, a minimum of 25% will fastly look like 30%. Another dynamic to consider is the basis of the assessment: Some lenders explode based on the market value and others based on immediate sale.
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Is bridging finance available if I do not have any income.?
Most lenders require proof of your income, but bridge loans are exhibited depending upon all fees and monthly interest payments, so there is no monthly payment. This aspect usually eliminates the need to prove that income can be used to pay a loan.
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For what bridging loan is used.?
Bridge loans can be used for so many reasons, but the primary use of these loans is to finance real estate transactions.
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How can 1st Choice property finance arrange bridging loans fastly.?
As a leading UK bridging provider, we have made significant efforts over the years to streamline the online application process while optimizing our services and efficiency. It also dramatically speeds up the process because it knows what precisely the lender needs for the applicant to succeed.
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Can you remortgage within six months of bridging loan.?
Yes and no. If this is your home, the length of ownership is generally not necessary. However, suppose this is a purchase to lease a mortgage. In that case, the most popular lenders want to own the property for at least six months, usually, those who do not limit the transaction to straight balance swaps.
Of course, there are exceptions to these rules. Still, they are generally provided through professional lenders. If you can show that you’ve spent money on a security upgrade/refurbishment, you’re more likely to succeed in the financing, but this isn’t just a refurbishment. They are essential tasks like adding a room or changing usage and simple kitchen and bathroom renovations.
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Can I apply for a bridging loan as a partnership or limited company.?
Yes! If you can prove your solvency and the assets you have secured have sufficient capital, we will find a commercial bridge loan that suits your requirements and circumstances.
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Can I still use my already mortgaged property as security for a bridging loan.?
If the property has adequate equity, deduct the outstanding mortgage debt from the market price and find the right product. We are constantly arranging second and third debt bridging loans for our customers.
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Can you take your equity after you have acquired property.?
Significant renovation of a home is usually fine. However, if you consider releasing funds for your next project within six months of ownership, it is a recommendation that you discuss it with a professional advisor. Usually, there is no problem except for six months.
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What is mezzanine funding.?
Mezzanine Finance, or funding, is a unique lending product for real estate developers looking for additional funding to complete a particular project. In mezzanine finance, most of the borrowed finance is provided by the major lenders, and the shortfall is engulfed by themselves and the mezzanine finance providers. This finance is usually lent on a second fee basis, with the primary lender paying the first fee for the asset.
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Why are bridging loan costs so much more expensive than a buy-to-let mortgage.?
Risk-Bridge loans are typically in a way to bring assets to a location available in the mainstream market. For example, create a working kitchen and bathroom. You can’t sell the property quickly to the mass market, but standard mortgage lenders need to get it back and put it up for sale if they need an immediate sale option. Bridging can also create good deeds and role interests instead of assessing monthly usability. Simply put, the lender has a more significant risk factor and therefore charges a fee.
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Why use a bridging loan broker than a bridging loan lender direct.?
Bridging is an exclusive area of real estate finance, and you need advice and expertise. Don’t make hurry just because the lender has a flashy website, reviews, or even reasonable interest rates. It does not mean that they can provide the essential thing: services to secure property on time. The best bridging loan broker can track things for you.
They also act as tough negotiators to ensure the best conditions and defend them throughout the process. It is more critical than you think-unlike mortgages. The best bridging brokers are in the process known for changing terms, not all lenders are equal to treating customers fairly.
Professional brokers can also guide exit strategies and test them before removing the bridge. But unfortunately, we often make calls when clients are stuck in an emergency or are about to lose their property altogether, using other agents, or trying to bridge themselves.
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