Elevating Possibilities: Large Bridging Loans for Seamless Property Transactions
Bridging finance for property development offers a swift and straightforward avenue to secure funds for initiating or concluding a development project. The borrowing amount is flexible, with no set limit, making it well-suited for addressing unique project needs efficiently. While recognized as a high-risk lending model, its cost aligns with this profile, making it a form of short-term secured loan. This lending solution proves particularly beneficial for property developers and business investors seeking prompt transactions, often intending to refinance or sell within a defined timeframe.
Benefits of Bridging Loans for Property Development
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What makes us stand out from our competitors?
What is property finance compared for?
What are the benefits of working with us?
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What is a bridging loan?
A bridging loan is a form of short-term property finance that allows developers to buy or refinance a property when a mortgage is not the best option.
- Buying under-value property from an LPA Receiver
- When you require the loan for a short-term
- When buying at auction which needs to complete within 28 days
- Borrowing against value not purchase price
- If you want to refurbish the property
How can I differentiate between a mortgage and a bridging loan?
The difference between a bridging loan and a mortgage is that the loan can be secured against a property that may not be suitable for a normal term loan i.e. and not fit to live in a property that is to be refurbished, a property whose title will be changed, or if the class of use of the property is to be changed throughout the loan. There are many different uses for a bridging loan.
Funds are available much more quickly than a mortgage; typically 3-4 weeks. Also, the interest payments for the bridging loan facility can be rolled up throughout the term, which means there would be no monthly interest payments.
Are there monthly payments?
It depends, you have the option; of either interest rolled up and deduction from the gross loan or service of the loan. The choice is yours.
How does property development finance comparison help?
As bridging loans are for the short-term, each client must have a plan in place to pay off the loan at the end of the term. This is known as an “EXIT plan” – often a buy-to-let mortgage to refinance the investment property.
Are there other costs involved?
Typical charges on bridging loans are an agreement fee, valuation fee, and legal fees. A valuation fee is dependent on the type and size of the property. The interest rate paid per month will be determined by the type of property and whether the borrower has good credit. Some bridging lenders charge an administration fee, and for deals, they may charge an exit fee when the loan is repaid.