Looking to secure a short-term loan for a property or to expand your portfolio? Here you’ll find more information and how we can help you.
You can use bridging finance to purchase a property at auction as bridging lenders can meet auction deadlines which are typically 28 days. Traditional mortgage lenders would usually not be able to fulfil such a quick turnaround.
Bridging finance is often used to purchase a property which requires renovation, refurbishment, conversion, extension or change of use to a HMO property.
Our specialist knowledge allows us to support first time and experienced buyers with bridging loans, helping you secure the right funding to grow a successful property portfolio.
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A bridging loan is a short-term loan secured on a property and can be used to purchase or remortgage a property.
The main types of bridging loans are:
Unregulated bridging loans – secured against investment properties for refurbishment or conversion to a HMO
Commercial bridging loans – secured against commercial property which could either be let to a long term business tenant or your own business premises
Development exit finance – secured against a development project to raise capital before the properties are sold or refinanced
Auction finance – Auction finance is a specialised type of short-term funding that is used to quickly secure a property purchased at an auction. Auctions are events where properties are put up for sale, often with the expectation of a fast transaction. Auction finance is designed to provide buyers with the necessary funds within a tight timeframe, usually 28 days, to complete the purchase of a property won at auction.
Bridging finance may be able to help if:
No, depending on the case you can either choose ‘serviced’ interest where you would make the monthly payments in the same way you would on a traditional mortgage, or if there is a refurbishment involved where you would not receive any rental income to cover the monthly payment you can opt for ‘retained’ or ‘rolled up’ interest. Retained interest is where the contractual amount due over the term of the loan is paid upfront, any unused interest would be returned to you. Rolled up interest is where the full amount of interest owed would be added to the loan and any unused would be returned to you.
Yes, the loan to value is the main factor in the rate that you will be offered. The more deposit you can put down the lower the monthly rate would be.
The two most common ways to repay a bridging loan are to remortgage or sell the property.
Applying for a bridging loan involves several steps that are similar to applying for other types of mortgages. Here’s a general overview of the process:
Initial Chat
Discuss your plans: Give us a call or email us to schedule a call to initially talk through your plans and what you are looking to do.
Documentation Gathering:
Prepare documents: Once we’ve had a discussion and what you are looking to do seems feasible and we’ve provided an idea of product interest rates, we will email you our documents to complete and a list of documents to provide.
Research and Preparation:
Research lenders: Once we have received our completed documents and requested documents, we will research lenders that offer bridging loans and provide you with the cheapest product options you and the property are eligible for.
Decision in Principle and Mortgage Application:
Once a product has been selected, we will submit the Decision in Principle and Mortgage Application.
Underwriting and Approval:
Underwriting process: The lender’s underwriting team will assess your application and verify the provided information.
Property Valuation:
Valuation assessment: The lenders will value the property and assess its suitability considering factors like location, size and condition.
Rental Income Valuation:
Rental assessment: The lender will also value the projected rental income of the Buy to Let property, considering the condition of the property, local rental market, and other factors.
Offer and Terms:
Mortgage offer: If your application is approved, the lender will provide a formal mortgage offer outlining the terms, conditions, interest rates, and fees.
Legal and Regulatory Checks:
Legal and regulatory review: Your solicitor or conveyancer will review the property’s legal title, ensuring there are no issues that could affect the mortgage or property ownership.
Completion:
Legal: Your solicitor will coordinate the completion process. It’s important to note that the process can vary depending on the lender, your location, and individual circumstances. Working with a knowledgeable mortgage broker can streamline the process, ensure you meet all requirements, and help you find the best bridging loan for your investment goals.
We are highly experienced and do not hesitate to give us a call to talk through your plans.
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Discuss your plans: Call us to initially to talk through your plans and objectives.
Prepare documents: Once we’ve had a discussion and what you are looking to do seems feasible, we will email you our documents to complete and a list of documents to provide.
Research lenders: Once we have received the required documents, we will research lender options and provide you with the cheapest product options that you and the property are eligible for.
Once a product has been selected e.g. a tracker, 2- or 5-year fix, we will submit the Decision in Principle and when that passes, the Mortgage Application.
Underwriting process: The lender’s underwriting team will assess your application and verify the provided information.
The lender will value the property and assess its suitability considering factors like location, size and condition. The lender will also value the projected rental income of the property, considering the condition of the property, local rental market, and other factors.
Mortgage offer: If your application is approved, the lender will provide a formal mortgage offer outlining the terms, conditions, interest rates, and fees.
Legal and regulatory review: Your solicitor or conveyancer will review the property’s legal title, ensuring there are no issues that could affect the mortgage or property ownership.
Legal: Your solicitor will coordinate the completion process. It’s important to note that the process can vary depending on the lender, your location, and individual circumstances.
Interest rates for bridging loans differ from traditional finance as they are priced per month, not per annum. For example, a traditional BTL or Residential mortgage would have an interest rate fixed for 5% for 5 years. A bridging loan is priced per month, for example 1% per month. The interest rate bridging lenders charge depend on the loan to value, typically between 0.80% – 1% depending on the market at the time. Each application is assessed at the time so do contact us to discuss your case.
We value your time and understand the urgency of property transactions. Our service takes a streamlined approach to the application process, reducing unnecessary paperwork and ensuring efficiency. We work diligently to expedite your mortgage approval, helping you transition from property search to ownership sooner. Your investment journey is our priority, and we’re committed to making it as smooth as possible.
What makes us Specialist Property Finance Advisers
Secure a mortgage deal today and we'll keep watch on your lender's rates. If a better, suitable deal becomes available, we'll let you know and help you switch.
We have amassed many positive reviews on Google and glowing testimonials from our clients over the years which we are very proud of.
We have excellent relationships with all of our banks and lenders. We're often asked for our opinions on the property market and current mortgage products.
We know that the mortgage market can move quickly, so it can be frustrating to see your lender release a better deal than your current one.
The Keys Mortgages Rate Watch Guarantee is designed to give you peace of mind, knowing you always have the best deal and protect you against missing opportunities of lower rates.
We guarantee to keep watch on your chosen lender’s rates and if a better deal becomes available, we’ll let you know and ask the lender to change product without having to start over (lender restrictions may apply). This is free and included as part of our service.
“I’ve had the privilege of working closely with Cheryl Williams and Amy Zakary over an extensive period, both in my professional role at Precise Mortgages as Sales Director and as a landlord with 32-years experience. In the realms of buy-to-let mortgages locating a broker with genuine specialisation is no small feat.
My confidence in Keys Mortgages is unswerving. Drawing from my experience conducting training at Precise Mortgages, I can vouch for Cheryl and Amy’s exceptional knowledge. Their commitment to delivering a quality service, fused with unwavering expertise, forms the bedrock of their five-star service proposition.”
A mortgage is a loan used to purchase a home. The property you’re buying serves as security for the loan. You make regular payments, which include both principal (the loan amount) and interest, over a specified period. As you make payments, you gradually own more of the property.
There are various mortgage types, including fixed-rate mortgages (interest remains constant), variable-rate mortgages (interest fluctuates), tracker mortgages (linked to the Bank of England base rate), and more. Your mortgage broker can help you find the right option based on your financial situation and preferences.
The amount you can borrow depends on factors like your income, credit history, expenses, and the lender’s criteria. Lenders typically use a multiple of your income or affordability calculations to determine the maximum loan amount.
An agreement in principle (AIP) is a preliminary indication from a lender that you’re eligible for a mortgage up to a certain amount. It’s not a guarantee but can help you understand your budget. A formal mortgage offer is a commitment from the lender to provide the specified amount at agreed-upon terms after a thorough verification process.
Aside from the property’s price, you’ll need to budget for additional costs like arrangement fees, valuation fees, legal fees, stamp duty (if applicable) and potentially broker fees. Your mortgage broker can provide a breakdown of these costs.
A mortgage broker acts as an intermediary between you and potential lenders. They analyse your financial situation, help you find suitable mortgage options, and guide you through the application process. Their expertise can save you time, ensure you’re aware of available options, and increase your chances of securing a favourable mortgage deal.
Send us your enquiry today and one of our friendly advisers will call you back for a free consultation at a time that suits you. Hassle-free with no obligations.
