What is an FCA Regulated Bridging Loan?
Only certain bridging loans are FCA regulated if you are intending to move into the property currently live in the property or any member of you your family will be living in the property either now or in the future then this is considered a regulated loan, what this means is that you will need to use an FCA Regulated broker to arrange the bridging loan on your behalf because the property is or will be your primary residence you will be subject to affordability tests as if you were to take out a traditional mortgage and these have to be on an advised basis to see if you qualify for a loan. Basically the regulated loan is treated to the same scrutiny as if you had applied to a mortgage provider, this would mean providing back up information such as bank statements payslips and any other information a bank or building society would need to offer you a mortgage you should think of a regulated loan as a very short term mortgage that will need to be paid back on the agreed date in the future.
A non-regulated bridging loan is a bridging loan that is lent out for a property that the borrower will not be living in; these are non-regulated by the FCA and considered to be like a business transaction and so you would not be liable to any affordability tests. I this instance it is the asset that provides the security and which the lender will fall back on should you fail to repay the loan, with this type of loan you do not have the scrutiny that you would have with regulated loans, the lender will not need any proof of earnings to show affordability and the asset is the sole item of security for the loan. Often borrowers go down this route when they have no proof of income or they just want a quick and easy transaction, with regulated loans it can take as long as a mortgage with all the background checks, this can mean many weeks and even months of legal work and documents going back and forth between the solicitors and lenders.
Who are FCA regulated Bridging Loans For?
A Bridging loan is used to purchase a residential property or could also be used to release capital from your existing home, this could be for whatever reasons you require the capital for, this could include anything from clearing unexpected bills, raising funds for your business, or catching up with mortgage arrears, in fact, you can use the money for anything you like.
What is the difference between a regulated and non-regulated bridging loan?
Regulated Bridging Loan.
In a nutshell, a regulated loan can only be offered to you by a regulated finance broker who has specialist knowledge in dealing with retail customers, who understand what you needs and requirements are likely to be and also explain what the pitfalls are when taking out this type of loan and the responsibility to make sure you can be reasonably expected to make the final payment.
Non-Regulated Bridging Loan.
With a non-regulated loan you can deal with any reputable broker as long as you have no intention of either you or any immediate member of your family will live in the property that the loan has been secured against. This option gives you more scope in the broker you instruct but the broker will not be regulated by the FCA, about 20% of all the bridging loans that are issued are non regulated meaning that the transaction is of a commercial nature such as property purchase at auction, refurbishment finance or simply raising money from an existing property for business purposes.
How do I apply for a Non regulated Bridging Loan?
As an FCA regulated broker, we are well placed to deal with your application for a bridging loan, we just need a quick chat to get a feel for what you are looking to achieve, we can then arrange for you to receive expert advice on the best options that are available to you
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 of experience you can be assured of the very best help and advice from our team call now on 0800 138 6001 or contact us via our website chat or contact form.
We are fully FCA Regulated
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FCA regulated bridging loan which loans are FCA regulated?
