Bridge loans are typically used to fund the purchase of one property while waiting for another to sell - one of our clients recently found themselves in this position, with a potential sale falling through, putting a timer on their dream property.
Previously, the client had what seemed to be an assured sale of his property in Gillingham. The property was semi-detached, and worth £375k, and once sold, the capital raised would fund a new property purchase; a Spanish property in Valencia, worth £160k.
However, the scenario would take a turn, after the client initially rejected the need for a bridge loan – as at the time, the sale was looking to go ahead. When it didn’t, the client re-approached us for a bridge loan solution to his problem. He now faced the lengthy ordeal of finding a new buyer for the Gillingham property in order to fund the property in Valencia by the deadline – of which, he had already paid a 15% deposit that he was at risk of losing.
The client was now on a much tighter deadline, and one that traditional borrowing, such as a mortgage, would not help. Our client was now at risk of letting his dream property slip away, as the potential competition could now beat him to it.
Thankfully, bridge loans are well poised to deal with sudden gaps in finances. Due to their short term nature, they can be organised quickly and can often be tailored to the client’s needs.
With a bridge loan, it is essential that any borrower has a realistic exit strategy worked out beforehand, for the repayment of the loan.
Our client had the exit strategy in place already, with the future sale of the Gillingham property. The proceeds raised from a sale could later be used to repay the bridge loan which we suggested our client find; he would need a bridge of £160k to secure the property in Valencia.
We resolved out clients time sensitive case by first searching for the right lender for the job. Our broker approached two lenders at first, and sought at the one which met the client’s needs best.
We organised finance for the property in Spain with a bridge loan of the exact amount needed - £160k, with a 0.44 interest per month. This allowed our client to beat out the competition at purchase the property he desired.
During the negotiations, our broker manged to save more time for our client with getting an online valuation for the Gillingham property – which, additionally, saved our client some money on top.
Because of our broker’s actions, our client was thankfully able to secure the property within the deadline. This would also allow much needed breathing room, and the client could now comfortably find the right buyer for his previous property.
Overall, the process took only 14 days – from application to completion.
In this case, bridge financing has demonstrated flexibility and efficiency, as it served as a valuable alternative to traditional borrowing, which would have been too slow.
From application to closing, our broker guided the client through the entire process to ensure the property purchase was completed before it slipped away and got our client a bespoke bridging loan solution, tailored exactly to his needs.
Whatever you need your next short-term finance loan for, we’ve got you covered. Let our friendly expert team find you the perfect tailor-made solution.
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