A Bridging Mortgage is a short-term borrowing solution for those who wish to borrow money based on the value of a property they already own or are looking to purchase, a bridging mortgage allows you to get access to funds quickly, bridging mortgages are also known as bridging mortgage loans, bridging loans or bridging finance, they are all basically the same financial product that offers short-term funding, whereas a traditional mortgage would be for a period of up to 30 years, a bridging mortgage can only ever be taken out for up to 18 months, if you wanted to extend the loan after this period you would have to refinance it with a new bridge mortgage.
Bridging Mortgages What are they used for?
Bridging Mortgages For Releasing Equity.
Bridging Mortgages are used to either release equity from a property that you already own that has equity in it, you can usually get up to 75% of the valuation less any borrowings that you already have on the property, so if you had a property worth £200,000 with a £50,000 mortgage on it you could get 75% of £200,000 is £150,000 less the £50,000 outstanding on the mortgage would give you a borrowing potential of £100,000.
Bridging Mortgage for the purchase of a property.
You can use a bridging mortgage to purchase a property if you need to make the purchase in a hurry because it is at say a cheap price and you want to buy it quickly, through an auction which will only ever allow you 28 days to complete the purchase, another reason to use a bridging mortgage is if you were a part of a chain of buyers and sellers and one of the buyers or sellers pull out meaning the whole chain could potentially collapse you could use a bridging mortgage to support the chain and allow the sales to complete, when the final property is sold the proceeds can be used to clear the bridging mortgage off and replace it with a more traditional long-term mortgage.
Bridging Mortgage what are the Costs involved?
A bridging mortgage can be obtained with interest rates from as little as 0.4% per month, the amount a lender would ask for depends on the loan to value, the desirability and location of the property that is being offered for security on the loan, in addition to this you will have to factor in a valuation fee by a Surveyor the cost of which will be worked out as a percentage of the overall value of the property you are offering as security you should work on around £150.00 per £100,000 with a £300.00 minimum so for a property to be valued at £200,000 expect to be paying in the order of £300.00 for the valuation and if the property was £300,000 the valuation fee from the surveyor would be £450.000 use our loan calculator to work out your overall costs.
You will also have to pay a lenders arrangement fee of up to 2% of the loan amount agreed, however this can be deducted from the loan when you draw it down rather than having to pay it up front, the only other costs for your bridging mortgage will be legal fees you will have to pay these for both your own and the mortgage lenders solicitors.
What can you do now?
We can certainly find you a Bridging Mortgage, but not only that because we specialise in bridging mortgages we have access to the very best rates in the UK from over 80 lenders, we will also go through each deal and fully explain which bridging mortgage really would offer you the best solution for your circumstances, based on interest rate, fees and more importantly one that you will actually be able to get with the least amount of fuss and effort and see if you qualify for this type of finance.
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With over 20 years experience you can be assured of the very best help and advice from our team cal now on 0800 138 6001 or contact us via our website chat or contact form.
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