How do I apply for a bridging loan? The process for applying for a bridging loan is fairly straightforward. Providing you have property, or other valuable assets that cover the value of the contract, you shouldn’t experience any problems securing a loan, bridging loans are based on the value of the asset that you are using to secure the loan so with a property worth say £100,000 and a loan of 70% of the loan to value you could apply for Bridging finance of up to £10M
First of all, the lender will need to be satisfied that you have collateral to put up against the loan. Ordinarily, this will be the property you are buying or your existing home. Sometimes it may be both in which case you can sometimes get up to 100% of the amount for the property you are buying.
Bridging finance companies carry out the same credit checks as banks do when you’re applying for a traditional loan. They want to be assured the value of the assets you are using as collateral cover the value of the loan so will conduct an evaluation report to give them the value of the property, no credit checks are carried out without your permission, don’t worry if you do not have a perfect credit file as bridging lenders are not so worried about county court judgments or late payments unlike other lenders, they secure the loan against the asset and will accept bad credit when offering a loan.
Although lending facilities check your credit history, there is still a possibility you will secure a bridging loan if you have a bad credit rating. Bridging finance is more flexible. Borrowers are accepted based on the value of your assets over your ability to make regular monthly payments.
Once your application is approved you will be asked to agree to an exit strategy to repay the loan. This includes a date when the loan agreement has to be repaid in full together with how you want to pay interest.
There are two options to pay interest. Rolled up repayments mean you will pay everything on or before the exit date. Early payments are not penalised. The other option to pay retained interest on a monthly basis although if this is the case a lender would ask you to prove that you have enough income to satisfy the monthly payments as they fall due, if you roll the interest into the loan it is paid when the loan is paid back which means no monthly payment this is how most bridging loans are issued.
It is also recommended that borrowers seek independent financial and legal advice prior to signing a bridging loan contract you should also note that if you or any family member intends to live in the property then you will have to deal with a fully FCA regulated broker in order to take out a loan.
UK Bridging Loans are one of the UK’S leading bridging loan brokers and can search all of the loans on the market to source the perfect deal for your circumstances.
Contact us now to discuss your proposal and we can assure you of the very best advice and service, call us now 0800 138 6001 or use the contact form on this page to compare loans.
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