How to fix a chain break with a bridge loan

Fixing A Mortgage Chain With Bridging Finance

Thankfully, bridging finance makes it possible to resolve this scenario, reducing undue stress and giving you options, flexibility and the cash in hand to purchase your dream property.

What is a mortgage chain, and how do they break?

A mortgage chain is categorised as a chain of buyers linked through the buying and selling of property owned by someone in the chain.

Purchasing property often relies on selling property (otherwise, you would have two mortgages to worry about), and often buyers purchase their next home with the proceeds from the one they are selling. 

Property chains create complicated situations and disrupt many individuals even if they were not directly involved in the break. Everyone will be impacted, regardless of their position on the chain and will naturally be stuck in a difficult financial situation.

 It is not uncommon for delays to continue for months, and transactions may fail altogether without being resolved.

How can a bridging loan help this situation?

Securing a bridging loan to fix a chain break is a common usage of short-term finance – it can be delivered quickly, working to unstick buyers who are in between selling their old property and buying their new home.

If a buyer pulls out at the last minute, bridging finance can raise the necessary funds for you to act as a cash buyer and secure your dream property before it slips out of reach. 

Bridging loans typically span 12 months, giving you plenty of time to repay the loan once the original property has sold.

How quickly can you get a bridging loan to secure?

With the help of a specialist broker, you can secure a bridging loan to resolve a mortgage chain break efficiently and at a much quicker pace. If you wait out the chain break, you risk losing the opportunity to buy your dream property, and you could be waiting months for a resolution. 

Bridging lenders can arrange finance quickly by taking it to the right lender, packaging your case and handling the application process. 

We can typically secure bridging finance for a chain break within weeks, depending on the case's complexity – a decision in principle can be made within days, however. 

Consider your exit strategy

Bridging loans offer quick solutions, but you must have an achievable repayment plan before the outset – this is less of an issue when the repayment is straightforward, such as the proceeds from a property sale.

Consequently, bridging finance requires a solid exit strategy to repay the loan on a short-term basis. In the case of securing finance to fix a chain break, the repayment will naturally be acquired when your previous property sells.

Borrowers need to reassure lenders with adequate security, and the loan-to-value (LTV) amount will determine how much you can borrow. Seeking the help of a bridging advisor is beneficial when securing the right deal and an appropriate lender for your case.

What will it cost? 

We can secure finance at a favourable rate from specialist lenders and help keep interest rates down for you – interest rates are more expensive with bridging finance than traditional mortgages because you pay monthly instead of annually.

There are also additional fees, such as legal, broker and arrangement costs.

To find out if bridge finance is the right choice for you, a bridge loan calculator can provide you with an indicative quote and support the initial stage of the process when calculating cost.

Our team can help fix a chain break with bridging finance

Bridge loans help you stay on top of time-sensitive issues. With our experience in short-term financing, we can help you find the right bridge loan for your situation. 

We have close, working relations with private and high-street lenders across the short-term market, meaning the cost to you can be kept low. Do not hesitate to contact us if you need help fixing a chain break when time is of the essence.