Bridging Loan Quote
If you are looking for a bridging loan quote there are many things to consider, a bridging loan quotes are based on a number of factors all of which will affect the amount you are quoted, these include what the property is that you want a quote for it could be a residential property and if so then either a house or apartment, it could also be for a commercial property or one with an element of both commercial and residential such as an apartment or apartments with a shop or office on the ground floor, loans are also available for commercial only properties and also land, with or without planning approval, any Bridging Finance Quote will be dependant on which property type you are looking to get a loan on.
Residential houses and apartments are the first choice for lenders as the asset is a far more easily sellable asset should they need to fall back on their security and as such these will always get the best rates of interest when taking a bridging loan.
Commercial with flats above will also get a keen rate but never as good as pure residential property mainly because commercial properties can be harder to sell due to the fact that it is usually an investor who would buy such a property this additional risk means they would offer a slightly higher interest rate, also over the last few years due to progressive tax rises the buy to let market has cooled considerably, with the 2nd home tax of 3% being introduced and also mortgage relief being reduced slowly over the next two years.
Purely commercial properties are fine but a lender will look at who the tenant is and how strong they are with regard to paying future rents, this has a significant impact on commercial properties as it is the tenant as well as the actual property that makes up the overall value of the property when doing a valuation.
Land with planning permission is fine to lend against although it would preferably be full planning as the land then can be easily valued because a lender knows exactly what the planning is for, with an outline planning permission a value is not so easy to ascertain although the land has an agreement for development the true value is only fully their when a lender knows exactly what it is for how many units and what the size of each unit is. Land without planning is really only worth what it is if it is agricultural land then that is the value it will not be valued on hope factor.
The other thing that you have to take into account is what the LTV is (Loan to Value) this will affect the interest rates that are available to you for your quote, with a lower loan to value always getting the best rates on offer. A low loan to value would be anything below 60% so a £60,000 loan or less against say a £100,000 valuation, bridging loans between 60 and 75% are also considered good loans for lenders, although once you get above 75% then interest rates will start to increase. You can get up to 100% if you are buying a property and also have equity in your existing property this is achieved by spreading the loan over both the property you are buying and also your existing one.
What costs will be included in the Bridging Loan Quote?
Your bridging loan quote is made up of three things first is the interest rate that will be quoted based on the property type that the security is Residential, Commercial, Mixed or Land, rates of interest start from 4% per month for a residential property with a loan to value of less than 60%, as previously stated this will vary based on the type of property and also location will also be a contributing factor.
The loan quote will also come with an arrangement fee which will be 2% of the total loan amount this is the same whatever property type it is, this is a fee to the lender for arranging the loan and will be taken from the loan advance rather than you having to pay it upfront so it is only paid when you actually make the loan drawdown.
Finally there will be legal fees that you will have to pay these will be both your legal fees and the legal fees that the lender will incur, you will have to pay the legal fees for the lender when you instruct them to proceed, these are usually £500 for simply case although can rise if the case is in any way out of the ordinary. You will agree to the amounts with the lender before your formal application.
How long to get a bridging loan quote?
A Bridging Finance quote can take just a few minutes to arrange we need to have a quick chat about the amount you are looking for and also what the property is and its location and what the current value is, details of what you want the loan for and how you propose to pay the loan back. We will then be able to tell you the interest rates that would apply, what the arrangement fees will be and also a good indication of what your legal fees will be it really is that simple.
What you can do now
Get in touch you can call us anytime 24/7 or fill in the form on this web page and we will contact you to provide your quote.
With over 20 years experience you can be assured of the very best help and advice from our team.
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