As well as helping you find competitive mortgages, insurance and other financial products, we also specialise in a unique product called bridging loans. Bridging loans by their very nature are a niche type of lending and are done through our business partners.

 

Bridging loan help

There are a few things to understand before we get started.

A bridging loan, or bridging finance as it’s also known, is a short-term funding option that is used to ‘bridge’ the gap between a payment going out and money coming in. Bridging loans are designed to help people complete the purchase of a property that would otherwise not be possible.

Bridging loans work by providing upfront funding to complete on a project or some form of property purchase before any mainstream credit funding can be secured against the same.

As an example, if you were to purchase a property at an auction, then you may find yourself in a position where you need the availability of funding quickly in order to complete on your purchase. Mainstream traditional funding methods will nearly always take a lot longer to arrange. In this situation you could get a bridging loan for the short term, complete your purchase, while at the same time arranging more traditional mainstream funding. Once you secure your mainstream funding, you could then use this money to repay the bridging loan.

When looking at the above situation, the ‘exit strategy’ to repay the bridging loan is securing alternative mainstream funding. A bridging loan lender will not always require you to secure alternative funding to repay their loan, but they will require you to have a strong exit strategy. This could be the sale of the property you are purchasing or the sale of alternative assets.

Another point to note is that bridging loans are almost always taken on an ‘interest only’ basis and while you can make repayments on a monthly basis, the lenders are happy for you to make no repayments for the duration of the loan and roll the interest up and repay it all at the same time as settling the loan.

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    Bridging: Frequently Asked Questions

    Bridging loans are a very specialist area of lending and as such the lenders and their products aren’t always visible to the less experienced eye.

    At The Residential Mortgage Hub, bridging are done through our business partners.

    Important information