£900K Bridging Loan for Upsizing to Worcestershire

A skewed property valuation can wreak havoc on a bridging loan application.  

If either the property you’re buying or your existing property is undervalued, it will push your loan to value up, meaning higher rates and potentially even void your application.  

In this case, our client had a low valuation come back for both properties involved in his bridging transaction. Find out how we helped. 

The Scenario 

Our clients were looking to upsize, with their current property on the market for £650K and their eye on a new place priced at £995K.  

They needed to raise £900K, as they were planning to fund the rest of the purchase themselves.  

Their exit strategy was to sell their current property and refinance the remaining balance with a standard long-term mortgage. 

However, they hit a roadblock with their previous broker and lender.  

The valuation for their current home came back at £100K less than the market price. And even worse, the new home they were looking at came back at a shocking £345K lower.  

This meant a dead end with that lender, and it meant their relationship with their former broker deteriorated, as they couldn’t provide a solution. 

The Solution 

Valuations are a crucial part of securing a bridging loan, but they can also be a stumbling block. Some lenders work exclusively with a single valuer on their panel, such as the one our client had already tried.  

While this offers a cost-effective and quick solution for clients, it causes problems when discrepancies arise. With a limited appeal, processes through the lender and a very brief valuation report (a small 2-page valuation summary with a few notes and numbers), clients can find themselves at a dead end, with the only option being switching to another lender and valuer. 

So, the client came to us, and we stepped in with a new approach.  

We sourced a new valuer through a different lender that had a much more thorough process, and the new valuations were significantly more in line with market prices. 

The property they were buying came back at market value, and the property they were selling was only just shy of their asking price. 

What's more, we also arranged their agreement in principle for their remortgage exit strategy (bridging lenders need this as proof of concept if you’re refinancing to exit your loan).  

This is an extra mile most brokers won't go to due to their singular specialisation in short-term property finance. 

The remortgage was also a fairly technical one, given that our client was self-employed and had only partially completed accounts for the previous tax year.  

But after several rounds of discussions between our mortgage adviser and the lender, the case was successfully put through. 

And lastly, a final hurdle was the fact that the client's solicitor was proving slow and unresponsive.  

Our broker was proactive in chasing them throughout the process and ultimately managed to bring them up to our standard of communication for the case, ensuring a smooth transaction — a touch our client greatly appreciated.