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From Farm to Home - Bridging Loan at £1.4M with Overage Agreement

£1.4M Hertfordshire

Discover how Bridging Loans Direct turned a £1.4 million bridging loan challenge into a triumph for a grand former farm in rural Hertfordshire. When dreams of a spacious home collided with legal complexities, our experts were there every step of the way.

The Scenario

Imagine the dream of moving into a spacious rural home in Hertfordshire, but with a catch – you must secure the new property before selling your current one. Our clients faced this exact scenario. The property in question was a magnificent former farm in Hertfordshire, priced at £1.65 million. Their plan was simple: sell their current residence and refinance any remaining balance with a long-term mortgage. While this seemed fairly straightforward for a bridging loan, there was a significant twist. An overage agreement, allowing the seller to claim future planning permissions' financial benefits, became part of the negotiation.

This twist posed a significant roadblock. It could negatively impact the valuation of the new property, even though our client had no intention of seeking planning permission or selling the property to repay the loan.

The Solution

To secure the best bridging loan financing option, we approached two lenders renowned for offering competitive rates: a private bank and a traditional bridging lender. 

While the private bank offered a slightly cheaper solution, it required monthly interest payments – not practical for our clients who needed the cash for home improvements.

Ultimately, we secured a product from the standard bridging lender at the market's lowest rate of 0.41% per month. However, the overage issue surfaced. Instead of standing idly by, we actively monitored and managed every aspect of the process. This diligence paid off as we negotiated with the agent to defer the overage clause's activation until after the bridging loan had been repaid, backed by a solicitor’s undertaking.

From that point on, everything ran smoothly – just as a 'buy before selling' bridging loan transaction should. This case underscores the importance of proactive engagement by brokers even after a loan offer is accepted, highlighting our crucial role in managing legal challenges and facilitating communication among all parties involved.

Opportunities may come with complexities, but with Bridging Loans Direct, you can confidently unlock your dreams.

If you find yourself in a similar situation, our experts specialise in bridging finance and are ready to find the perfect funding solution for your property transaction. Schedule a free telephone consultation with us at your convenience.

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