Bridging loans are a very popular form of borrowing and are used primarily by property developers (residential & commercial). Second charge bridging loans may be used to fund financial shortfalls in property purchases, purchase gaps or help to get a property to a habitable standard. Just like secured loans for normal residential properties, bridging lenders have products available as second charges – this means that for smaller loans or loans needed in a hurry, you can keep the current mortgage in place and release short term funds on your commercial, residential or buy to let property.
2nd charge short term loans can be used for almost any legal purpose, they can be arranged in as little as 32 hours (depending on solicitors) and they’re mainly used for:
Whilst these tend to be the main reasons people use second charge bridging loans, the list is not exhaustive. From standard development to raising funds for a wind turbine or simply purchase adjacent land to open up the development – we could help with all of these and more.
Short term bridging loans are repaid differently to normal residential homeowner loans. This is due to the fact that bridging loans are taken out over a much shorter period. Some standard repayment vehicles (such as capital repayment) would most likely price the products right out of the market. However there is a need for them (as their popularity proves) and the repayment, or exit strategy is one of the most important factors considered by a lender when considering an application.
Repaying a short term loan would usually be done by selling the property to make a profit, or by refinancing. These 2 exit strategies aren’t the only way to clear a bridge loan however they do seem to be the preferred repayment methods. If you are unsure as to how you would repay a short term loan, we could help with this prior to submitting any application.