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What is your Best Bridging Loan?
Obviously if you are looking for a bridging loan you want to know what is the best bridging loan for your circumstances and this is down to many factors the best bridging loans are ones that offer you the most competitive interest rates and enable you to achieve your objectives, bridging loans are taken out for four reasons one is that you want to release equity from a property or properties that you already own, the second is if you want to buy a property quickly it could be a distressed sale or maybe at an auction, say you want to buy a property before selling your current property, or say for instance you are buying a property and there is a chain of buyers and sellers and one pulls out of the transaction breaking the chain, or finally a bridging loan for the refurbishment or development of new build properties.
In order to find the best bridging loan for you it really is matter of matching you with a bridging loan lender that best fits your circumstances, with over 80 lenders offering bridging finance in the UK it really depends on what you are looking to do, some lenders will specialise in auction finance, others development bridging loans whilst others prefer to offer loans to private individuals, bridging loans are also covered by FCA regulation if it is a loan that is to be your primary residence these are called regulated bridging loans and can only be arranged for you by a fully authorised broker who is regulated by the FCA, as these are considered in the same way that a mortgage application would be, with auction purchase, development bridging or cash release if you do not live in the property then they are not subject to FCA regulation.
So what are the best bridging loans, well it really is a loan that works for you both financially and achieves your objectives?
What are the best interest rates can I get on a bridging loan
The interest rate that you are charged by the lender will depend on three factors, the location of the property that you want to secure the loan against, if the area has a buoyant housing market and properties are selling quickly then you will always get the best interest rates on offer as a lender will feel secure knowing that you will be able to sell the property without too much effort, another factor is the type of property that is being offered be it residential, commercial or land that you are looking to buy or sell and the third is what loan to value you are looking for on the loan, 60% or less is the most favorable with interest rates rising as the loan to value gets towards 75% loan to value, note loans of up to 100% can be arranged if you have additional properties that you can offer as security, this works if you are buying a house and have not sold your own then the lender would give you a percentage on the property you intend to buy and then also a portion on your existing property, they would do this by financing the whole loan and repaying any outstanding mortgage that you may have. Interest rates for the best deals start at 0.4% per month and for a complex situation with a high loan to value on say a commercial semi-commercial or land transaction they can rise to as much as 0.9% per month.
It really is impossible to say what rate you would qualify for without having a quick chat to go through your proposal and we can then tell you what rates you would be available to get for your bridging finance.
What are the Arrangement Fees?
An arrangement fee is what a lenders charges for arranging your loan, there is no best arrangement fee rates for a bridging loan as all lenders charge exactly the same which is 2% of the loan amount required. This is only payable when you actually drawdown on your loan.
What Are The valuation Fees?
Valuation fees are payable to the surveyor who will be instructed by the lender to carry out a valuation on the property you intend to offer as security for your bridging loan. You can ask the lender for a list of valuers that are on their panel of surveyors and then ask them to quote their best price for the valuation, this is a worthwhile exercise as surveyors like everyone else will be expensive when they have a lot of work on their books and less so if they are keen to get the business.
You can expect to pay in the order of £150 per £100,000 of the properties value with a minimum of £250 so a £100,000 property would be £250 for the valuation whilst a property of £200,000 would be around £300 it is the valuation that will determine if you qualify.
Best Legal Fees for Bridging Finance
All lenders will ask you to cover their legal fees and will expect you to use their solicitors so there really is no best option here, however lenders solicitors are usually reasonable in their charges as they want to stay in favour with the lenders, note you will also have to instruct a solicitor to act for you on the transaction so it is best practice to get a firm quote before you actually instruct them to act for you.
Legal fees start at around £500 but can be more in complex transactions or when problems are found during the due diligence.
What can you do now get a Quote.
Give us a call or contact us through our web form we will then contact you for a quick chat and go through all of your options based on your loan requirements, we can then outline the best loan that fits your requirements.
With over 20 years experience you can be assured of the very best help and advice from our team.