Getting A Bridging Loan For A Birmingham Property
Bridging loans are a short-term financial solution – an alternative to traditional finance with a fast turnaround, which can be catered towards your property finance needs in Birmingham or the West Midlands.
What are bridging loans and how do they work?
Typically, Bridging loans work to finance the purchase of property during a transitional period – you need to “bridge the gap” between selling your current home, and buying your next property. The loan is repaid through the sale of the house it is secured against.
With a bridging loan, the application process is straightforward, flexible, and lacks the stringent requirements of traditional finance from high-street banks and lenders.
What are the advantages of bridging finance?
- Fast-finance - the primary advantage of bridging loans is the speed at which they can be delivered - making you a cash buyer in a competitive market will expedite the entire process and lock in a dream property. Loans can be secured from £50,000 to several million.
- Flexible in its application – Bridging finance can be applied to multiple scenarios that suit any property purchase – residential, commercial, property development or renovations. Providing you have adequate security, the loan can be used to bridge any gap when financing property.
- Gives you the time you need – a bridging loan can offer breathing room for important financial decisions. Bridge finance gives the necessary time to find a suitable buyer, allocate funds for renovations, or proceed with property development plans without delay.
- “Rolled Up” interest – While interest rates are more expensive in bridging finance, you can “roll-up” payments - negating long-term interest on the loan by repaying it earlier.
How are bridging loans commonly used in Birmingham?
- Residential property purchase – a primary use of bridging finance, if you’re a home-buyer, is to quickly snap up your next property when funds are otherwise unavailable.
- Fixing a chain break – If a buyer pulls out, this is known as a “chain break”. This scenario can leave you stuck in the middle; between selling and purchasing a new property. A bridge loan will solve this issue, allowing you to move ahead with a property purchase.
- Downsizing/Upsizing - securing the right property for you could prove challenging without swift action and the capital to hand. Securing a bridge loan may be necessary to stop your dream Birmingham property slipping out of reach.
- Renovations and property development – with bridging finance, investors can snap up lucrative properties in the West Midlands, to capitalise on lucrative development deals. Alternatively, funds raised through bridging finance can be used by homeowners wishing to meet their property’s full market potential.
- Lease extension - a bridging loan can be used to extend a lease if you’re hoping to qualify for a mortgage with a mainstream lender.
- Buying a property at auction – auction properties require a percentage upfront, and need to be financed within 28 days. Bridge finance can raise the capital needed, allowing you to move forward.
What does a Birmingham bridging loan cost?
Initially, you can use a bridge loan calculator to get a general idea of the overall cost of a bridging loan. However, the cost will vary depending on your case and a lender’s criteria – it is best to seek a consultation with a specialist broker when proceeding with bridging finance.
There are also additional fees to consider, such as legal and broker fees.
Lastly, always consider your exit strategy
Bridging loans are typically secured against a property, yet you must still account for delays or oversights depending on what the finance will be used for.
When it comes to property development projects, renovation or conversions of buy-to-let properties etc., you must consider carefully anything that may hinder repayment.
Contact us for advice in securing the right bridging loan for Birmingham property
In contacting our specialist team, you can access all financial options at affordable rates from suitable lenders.
We can help get the right bridging loan for you to secure a property in Birmingham or kick-start a property development project.
What we can offer:
- Residential, commercial and development property finance – for all common uses, and fitting a variety of clients’ needs.
- Flexible terms (1 to 36 months)
- FCA regulated and unregulated loans
- “Rolled-up” interest schemes
How we can help:
- We can secure bridging finance for any type of borrower – limited companies, individuals (no upper age limit), sole traders, partnerships, and trusts.
- We have access to the entire short-term market
- We have established relations with a network of both niche and specialist lenders
- And, depending on the complexity of a case, we can secure finance in under a week (5 to 7 days)
