Fast Bridging Loans

What are the advantages of a fast bridge loan?

When speed is a necessity, bridge loans can often facilitate a myriad of transactions – especially property transactions for larger sums, when you may have funds tied up elsewhere or are stuck in between purchasing a new property and selling your existing one.

The obvious benefit is speed, and we can secure you short term financing, (depending on the amount required) within a week to two weeks – as most bridge loans last a term of 12-36 months.

If you need a bridging loan urgently, then the flexibility of our service will allow you to get a successful application through to lenders – and you’ll be able to sort through all your available options and scope out the best possible deal when time is of the essence.

Why is a bridging loan broker useful?

By applying for finance through a broker, you gain access to more options and can save a lot of time.

Here’s what an experienced broker can do for you when it comes to applying:

Brokers have access to the entire market of lenders, of which some may be unavailable to individuals going direct – brokers will get you; comparative rates, leverage favourable terms for you, and assist with the application process.
Brokers can advise on the best course of action and see that your exit strategy and plans are solid. They will help with options, how best to proceed, and answer your questions.
Brokers create a competitive environment – this can lower rates overall.
Brokers know how to best present a client’s situation to lenders, making borrowers a more appealing option.
They will help you understand and guide you through the entire process – dealing with documentation, giving you an indicative quote, and dealing with lenders on your behalf.
They will work through your interests to secure the best deal possible.

While there is an additional cost, this is offset by the speed in which a bridge loan can be organised and delivered through a broker – and it is essential, especially for the inexperienced, when preventing mistakes that can occur in a time-sensitive matter when you’re in need of a quick solution.

Should I go to a lender directly?

While nothing stops you from approaching lenders directly – it can prove more of a hindrance than a benefit.

If you're inexperienced in bridging loans and you are simply looking for a quick solution, then applying for finance through a broker is often the more popular choice.

It can often be difficult to recognise whether a lender best suits your circumstances – since bridge loan lenders often deal in bespoke products with specialisations in different areas.

With our services, we can find the right lender without you going through the hassle. We can determine exactly what type of loan you’ll need, and we can organise finance a lot quicker due to our connections and established relationships with lenders. The speed at which a bridge loan can be secured is down to the efficiency of working through expert bridge loan brokers.

Bridging Loan Calculator

How much can I borrow?

With bridge finance, there aren’t many upper limits – yet, the loan available to you will ultimately be determined by a number of factors and criteria.

The bigger the security, the more you may be able to borrow.

A lender will calculate your borrowing power using your loan-to-value (LTV), calculated by dividing your loan amount by your securities value – this will determine exactly how much you’ll get.

Here are some of the key factors which will determine the amount you can borrow:

The value of the security or assets (property)
Location of property
The length of the loan term
Your financial circumstances
The LTV (Loan-to-Value) percentage - the loan amount divided by the appraised property or assets value.

Offering multiple properties as security will increase the upper limit of your borrowing potential through a higher LTV percentage.

The value of the assets you plan to offer as security must be sufficient to cover the loan - taking into account interest payments or additional fees.

It is always important to remember your exit strategy, which will typically be the property your loan is secured against – it is helpful to have a solid, calculated plan before applying and to consider carefully how long the loan will last.

How do I apply for an urgent bridging loan?

Bridge loans can always be organised relatively quickly, so the application process will not differ regardless of how quickly you need the funds.

However, with a bridging specialist’s help, you can be pointed in the right direction based on your needs.

What you will need is this:

A form of security, typically property(s) - or a high value asset, which a loan can be secured against.
A repayment plan, and a solid exit strategy. Bridge finance is considered a higher risk form of lending, so naturally, a lender will want to know how you intend to repay and will need some assurances. However, the exit strategy is usually through the sale of the property the loan is to be secured against, or it could be through refinancing with a traditional mortgage loan.

With bridging loans typically being secured with property, most lenders will not need proof of income – bridge loans are repaid at the end of the term, alongside interest payments. Hence, a borrower’s income is not usually a roadblock in terms of having a successful application. They are mostly concerned with the worth of the collateral.

Urgently need a bridge loan? - Get in Touch

In a time-sensitive situation, bridge loans offer both speed and flexibility -and with our help, you can find the best possible deal and have the whole process streamlined through our access to a variety of specialist lenders.

What we can offer:

Both residential and commercial loans, and development property finance.
Flexible terms (Terms from 1-36 months)
As much as 80% LTV (more if other assets are involved)
“Rolled-up” interest schemes

How we can help:

We can secure bridging finance for any type of borrower – limited companies, individuals (no upper age limit), sole traders, partnerships, and trusts.
We have established relations with a network of both niche and specialist lenders
Finance within 7 working days, depending on the complexity of a case, and can be quicker when there is a need for urgency.
We can make you feel at ease with the process, find a loan most suited and help you decide whether an urgent bridge loan is right for you.
At Clifton Private Finance, our bridge loan experts will help you avoid the common mistakes and pitfalls of those looking into short term finance.

We will be able to answer any questions you have, so get in contact with our team at Clifton Private Finance to book a consultation and start viewing all your available options and the best deals through our broker service.

Bridging loans can be used for:

Bridging the gap between purchase and sale - Secure a property fast before it is snapped up by another buyer – even if you have not yet sold your current home
Buying a property to renovate and sell - Short term finance provides an excellent way to flip property quickly within a 12 to 24 month timescale.
Downsizing - Timings between buying and selling an existing property are rarely aligned. A bridging loan can smooth the process.
Mortgage chain issues? - Secure your ability to buy even in the event that the home buying chain breaks down – for example, if the sale of your old house falls through, a bridging loan can allow you to still have sufficient funds to purchase the new house
Buying an auction property? – use a bridging loan to pay the required percentage needed to secure the property on the day of the auction
Need to move fast? - Get a fast, temporary cash injection when you most need it during the property purchasing process. The ability to move quickly can make the difference on any property transaction.
Development finance - If you are buying property to redevelop and you need finance to get your project off the ground then a bridging loan could help make the difference
Lease extension - Extending a property lease can be costly and may be necessary before a mainstream lender will consider giving you a mortgage. A bridging loan to purchase a lease extension can provide you with the funds to make this happen.
Commercial property - Finance for purchase or refinancing and making property improvements.

To investigate your bridging loan options call us on 0117 959 5094

Bridging Loan Calculator

About Bridging loans

What are some alternatives to bridging loans?

Here are some of the most common alternatives to bridging loans:

Second-charge mortgages
Remortgaging
Equity Release
Personal Loan
Savings or Family Support
Development Finance
Commercial Mortgages
Refurbishment Loans

We break down each of these other financing tools in our full guide to alternatives to bridging loans.

While none of these options provide the flexibility, loan size and low interest rates that bridging loans do for property transactions, you may find they are more appropriate finance options for your specific situation.

Is there an age limit on bridging loans?

No, there is no strict age limit for securing a bridging loan.

Bridging loans are typically 12 months in duration, which means that there aren't age limits in place like there are for mortgages that can last for 25+ years.

The main example where age may be an issue is if you plan to refinance your bridging loan with a standard mortgage. In which case, you'll need to be eligible for a standard mortgage to qualify for your bridging loan - and if you are approaching retirement age, this could be an issue and you may be rejected for a bridging loan.

However, we work with specialist equity release and lifetime mortgage lenders that can provide a Decision in Principle for later-life lending (if it's feasible) so that your bridging loan can be approved if it makes sense with your broader strategy.

Do banks still do bridging loans?

No high street banks currently offer bridging loans. Instead, bridging loans are provided by specialist short-term finance lenders.

At Clifton Private Finance, we are a whole of market brokerage that deals with multiple bridging loan lenders, and we act as an intermediary between clients and the lender ensuring the process is smooth and hassle-free, and making sure our clients are getting a good deal.

Are bridging loans regulated?

There are two types of bridging finance: regulated bridging loans and unregulated bridging loans.

It simply depends on the intended use of the property you're purchasing.

When you or a family member intend to live in the property you’re purchasing with your bridging loan, you’ll need a regulated bridging loan.

If you're getting bridging finance on property that you or a family member will not be living in, or if it’s a commercial property, then you’ll need an unregulated bridging loan (commercial bridge loan).

And if you intend to sell the property to repay your bridging loan (flipping the property) instead of refinancing or selling another property, you’ll get an unregulated bridge loan.

Regulated bridging loans are authorised and regulated by the FCA and are usually locked to a 12-month maximum term. Unregulated bridging loans, meanwhile, can have extended periods of up to 36 months and are generally more flexible.

If you’re unsure, it’s best to speak to a qualified adviser to go over exactly what you need and find the best bridging loan for you.

Are bridging loans safe?

Yes, bridging loans are generally considered safe provided they are used for suitable property transactions. Speaking to a bridging loan adviser is recommended if you're unsure about the risks and suitability of a bridging loan for your situation.

Generally speaking, the main risk of a bridging loan is that if you cannot repay the loan, your property can be repossessed and sold to clear your debt.

For example, if you take out a bridging loan to buy a new property but your existing property fails to sell and you cannot recoup the funds, this could become a risk. However, bridging lenders always require their own valuations for any property involved in a bridging transaction to combat this.

Another example could be that you're unable to secure a mortgage to refinance your bridging loan. At Clifton, we make sure your remortgage plans are sound if this is your bridging loan exit strategy, and can even arrange your mortgage for you through our dedicated mortgage advice service on the other side to smooth the process.

Repayments

Can you turn a bridging loan into a mortgage?

You cannot turn a bridging loan into a mortgage, but you can repay a bridging loan with a mortgage and effectively refinance it into a long-term arrangement.

This is common when buying an unmortgageable property with a bridging loan, carrying out refurbishments, and then mortgaging it once it is wind and water-tight and a new valuation has been carried out.

This is also common for properties bought at auction where a mortgage would be too slow to arrange, and so a bridging loan is used which is then replaced with a mortgage later.

What are bridging loan exit strategies?

A bridging loan exit strategy is simply the way in which you plan to repay your bridging loan.

The most common exit strategies are selling an existing property, selling the property you're purchasing, refinancing with a mortgage, or a combination.

Other more unique exit strategies can include selling a business, receiving a pending inheritance, or receiving a large tax rebate.

Do you pay monthly instalments on a bridging loan?

You do not pay monthly instalments towards the capital loan of your bridging loan. Some bridging loans require you to repay the interest accrued each month, but most lenders will actually give you the option to roll this up into the loan value, meaning you repay it with your lump sum at the end and have absolutely no monthly commitments.

It's worth noting that as soon as you pay off most bridging loans, you stop accruing interest - so, the quicker you pay it off, the less expensive it will be, and there are typically no ERCs (early repayment charges).

How are bridging loans paid?

If there is a purchase involved, bridging loans are paid from the lender to the lender’s solicitor, then to the client’s solicitor, and then to the seller’s solicitor - so, you as a client will not see the funds in your own account - similar to a mortgage.

If there is no purchase involved (for example, for a bridging loan for home improvements before selling), the funds go from the lender to the lender's solicitor, to the client’s solicitor, and then to the client's bank account.

In terms of how bridging loans are repaid by you, they are repaid as a lump sum, either at the end of your term or during it. You can choose to either 'service' the interest, so pay the interest back monthly, or roll it up into the value of the loan to also pay this off as a lump sum along with the capital.

Deposits and terms

What is the longest bridging loan term?

Regulated bridging loans (for residential properties) are typically 12 months, however, some non-regulated bridging loans for buy to lets and commercial properties can be up to 36 months.

Some lenders are more flexible on term durations than others, and it can be a case-by-case basis as to whether you'll get approval for a longer loan term.

How short-term are bridging loans?

Almost all regulated bridging loans are short-term, and have a duration of 12 months.

Bridging loans are short-term by nature. However, there can be some flexibility on term length, particularly for unregulated bridging. For example, bridging for development projects, flipping properties, buy to let bridging loans and commercial bridging loans can all have longer terms up to 36 months.

Some bridging loan lenders allow you to extend your term if at the end of 12 months your property hasn't sold or your alternative funding hasn't come through yet - however, this is down to the lender's discretion and there are no guarantees. It's important to be aware of the risks of bridging loans, and your property can be seized and sold to compensate for failure to repay.

Can I get 100% bridging finance?

You can effectively secure a loan for 100% of a property value, but only if you have other property as security to keep your overall loan-to-value below 80%.

So, if you're getting a loan for 100% of a property value, you'll need another property in the background to secure it against.

The easiest way to see if you're eligible is either to give us a call or use our bridging loan calculator that automatically calculates your LTV.

Do you need a deposit for a bridging loan?

You don't necessarily need a deposit for a bridging loan in the traditional sense of cash reserves, but you do need security for your loan in the form of another property or asset to keep the loan-to-value below 80% at a maximum.

For example, if you're buying a £300k property with a £300k bridging loan, you'd need another property to secure the loan against along with the property you're buying, or else your loan to value would be 100%.

Miscellaneous

What are net vs gross bridging loan calculations?

Understanding the difference between net and gross calculations is essential when comparing deals from bridging loan lenders.

The calculation determines the maximum LTV (Loan-to-Value), how much you can borrow, and how much you will eventually repay.

Here’s the difference:

When calculating the net loan amount for bridging loans, the borrower deducts the loan costs and additional fees (such as the arrangement fee) from the total loan amount - this is known as net loan calculation.

Contrary to that, gross loan calculation is based on the loan amount the borrower can receive without deducting any costs or fees.

In brief, the gross loan calculation represents the total amount available to the borrower, while the net loan represents what the borrower ultimately receives after deductions.

Which calculation do lenders use for bridging loans?

A common complication arises when it comes to comparing bridging lenders, as different lenders advertise their bridging loan products differently. The upshot of this, is that it can become difficult to determine if a higher LTV (loan-to-value) represents the actual amount you could receive.

Lenders typically use a gross loan calculation when advertising or promoting their bridging loan products.

This is because the gross loan amount represents the maximum loan amount the borrower is eligible to receive, and can be used as a marketing tool to attract potential borrowers.

Nevertheless, the net loan calculation is used when negotiating an agreement, which is the amount the borrower will receive after deducting fees and other costs.

Borrowers are responsible for repaying this amount, and lenders will use that amount to determine repayment schedules and other loan terms.

How a broker can help with bridging loan calculations

A broker can assist with bridging loan calculations by providing clarity, expertise, negotiation skills, and a comparison of loan options to help you make more informed decisions.

What is the difference between first-charge and second-charge bridging loans?

A first charge bridging loan refers to a bridging loan that is the only charge against the property, i.e., there is no existing mortgage on that property.

A second charge bridging loan is when there is already a mortgage on the property that the bridging loan is being secured against.

In the event of repossession, the 'first charge' has the legal right to be repaid first, before the second charge, which is why second charge loans can be slightly more expensive as they're a greater risk to lenders.

It is still entirely possible to secure a second-charge bridging loan and they are common within the industry.

Do you need a valuation for a bridging loan?

Yes, your bridging loan lender will require a new valuation to be carried out for all properties in your bridging loan transaction.

In some cases, we can work with lenders that can facilitate a 'desk valuation', which is a valuation carried out online based on the local property market, images of the property and the specifications of the home - this can save a considerable amount in fees and speed up your application, but it's not always possible, especially for higher value properties.

Can you get a bridging loan with bad credit?

Yes, you can get a bridging loan with bad credit.

While lenders will look at your credit score and factor it into your application, there is no requirement for regular loan servicing with a bridging loan, and so your income is not analysed and your credit score is significantly less important than with a mortgage.

Does a bridging loan make you a cash buyer?

Using funds from a bridging loan to purchase a property puts you in a strong position as a buyer - similar to that of a cash buyer.

Being a cash buyer is attractive to sellers because there is no onward chain requirement, and the funds are ready to go for the purchase.

Using a bridging loan also eliminates the need for the chain to complete, and puts you in a position where funds can be available in a matter of weeks for completion; effectively rendering you a cash buyer to prospective sellers.

We can secure funds within 72 hours for urgent property transactions.

How much do you want to borrow?