WHAT IS BRIDGING AND HOW IT WORKS | INTEREST RATES AND FEES | THINGS TO NOTE
London-FS specialise in bridging finance of £500k plus for professionals and high-income earners, offering a discreet and personal service.
Bridging Finance is a popular method to raise short-term finance, which is secured against an asset.
Generally bridging is used for auction purchases, releasing equity to invest, payment of HMRC bills, and property refurbishment & development, amongst others.
To discuss you bridging requirements in the strictest confidence please get in touch using the below form.
Bridging loans work as a means of financing or as they are called 'bridging' money from a lender.
For example you want to purchase a property which has vast potential. It requires works to be done to increase its value. Ideally you need the procurement of funds to be quick and flexible to allow you to purchase the property fast, the works to be done to add the value and the property to be either sold or refinanced at the higher value.
Bridging loans are secured (as is a mortgage) on an asset or multiple assets depending on the structure of the deal being presented.
Rates for bridging finance were very expensive and considered a last resort lending.
In recent times more lenders have entered the market and made it more competitive. This means rates can start form as low as 0.45% per month, circa 5.4% per annum.
Generally bridging rates are worked out a monthly basis as the loan facility is based on 6,12,18 or 24 month terms. This means you could borrow 'X' amount on day one and pay this back to the lender in month 6. This would mean you are paying 0.45% for 6 months only.
If you are considering Bridging, then we suggest you thing about the below points:
High Risk - Bridging is a high risk lending strategy.
Exit Route - You must know your exit route and our lenders will want to know what this is at the outset of the enquiry.
Fees - make sure you are comfortable with the fees involved with Bridging loans.
Cashflow - Before you apply to us, we would want to see your research, due diligence, comparable properties, factoring your interest roll-up, considering market changes and trends, understanding how it works and why it benefits you.
We would be more than happy to discuss this more detail. Fill in the form below and arrange a call with a specialist broker.
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