Getting A Bridge Loan For A Buy-To-Let Property

What is a buy-to-let bridge loan?

A "buy-to-let bridge loan" is simply another name for short-term financing used primarily for buying, renovating, and renting out properties. If you're a landlord, this can be a great way to expand your portfolio of properties quickly and at a reasonable cost depending on your financial circumstances. 

BTL bridge loans are available for;

• Residential property
• Commercial property 
• Additionally, they can be unregulated and FCA-regulated loans

Remember, it is typically commercial bridging loans that are unregulated – you can find more information on commercial bridging loans here. This type of BTL loan allows the lender to set their own terms. 

An unregulated commercial loan can prove beneficial, giving you more flexibility in getting a buy-to-let mortgage and paying off the loan quickly. Still, you must pay close attention to terms outside FCA-regulated bridge loans as they may be unique to your own situation and circumstances. 

Importantly, the type of funding a BTL loan offers is a short-term solution only – whether for the purposes of; renovation and refurbishment or, setting up a buy-to-let mortgage and eventually renting the property out. 

Like all bridge loans, this type of finance will help “bridge a gap” while you transition into a longer-term solution for your buy-to-let property or property portfolio. 

Why choose a buy-to-let bridge loan?

The two most useful aspect of a BTL bridge loan, and any bridge finance solution, is; speed and flexibility. With a BTL loan you have the option to act on time-sensitive situations:

• Property investors can act quickly with capital from the loan, and secure a BTL property in a competitive market.
• Typically, short-term finance of this nature can be arranged very quickly – especially when compared to traditional finance. So landlords and property investors will not miss out on opportunities. 
• Often, a property may come onto the market through an auction and be in an un-mortgageable state. With a BTL bridge loan, you have the option to buy at auction and use capital to renovate a property that is not currently in a liveable state, and eventually rent it out. This would be impossible through traditional mortgage lenders, as the criteria typically rule out getting a mortgage on an uninhabitable property.
• Lastly, if you’re a budding investor it is advisable to start with a smaller project. Yet, a BTL bridge loan can still be the perfect entry point for those that may struggle to raise funds alone, and leap at lucrative opportunities. 

A BTL loan gives the investor time to transition into long-term financing, but most importantly, it allows flexibility and options when looking to snap up properties to rent out.

How much can you borrow?

Your loan amount depends on the loan-to-value (LTV) - the percentage of the value of your property or asset that a lender is willing to lend you. 

If you plan to offer assets as security, you must ensure they are worth enough to cover the loan, including interest and additional fees. Landlords would typically refinance with a Buy-to-Let mortgage, which covers the exit strategy, as the security would the property. 

The maximum LTV for a buy-to-let property is usually 85% and you can secure between £50,000 and £25m based on additional security. 

You can use our bridge loan calculator to get an initial quote on the overall cost of a bridge loan for a buy-to-let property

How quickly can I secure a loan to finance a buy-to-let property?

After the application process, we can typically get you a decision in principle within a few days, depending on the complexity of your case. 

It usually takes 7-14 days for funds to appear in your account, but sometimes they may appear sooner.

If you’re a landlord looking to finance a buy-to-let property, contact us now

We specialise in securing landlords’ market-leading bridge loans from our network of specialist lenders across the entire short-term market.

What we can offer: 

• Commercial and development property finance - Buy to let, HMO, investment and commercial properties
• Flexible terms (Terms from 1-36 months)
• As much as 80% LTV (more if other assets are involved)                      
• “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 established relations with a network of both niche and specialist lenders
• Finance within 7 working days Depending on the complexity of a case