Why Use Truffle For Your Bridging Loan?
At Truffle, we have helped hundreds of clients get the best possible bridging loans. This is because as bridging loan brokers, we have access to all the best lenders. If you require a bridging loan, we have experts with years of experience that can walk you through bridging loans in finer detail. Whether you are buying a new family home before selling your current one or any other property buying scenario, we are always on hand.
To set up a bridging loan, speak to our team on 029 2010 6759 or email us.
What Are The Benefits?
- Arranging a bridging loan is usually quite quick, which means you have fast access to cash
- Bridging loans are a form of asset-backed lending, which means there are no lengthy approval stages as the loan is secured against an asset of value
- You can “bridge the gap” for a range of different purposes (although the loan is typically used for property purchases)
- All types of property can be used as security
- Allows you to be a cash buyer for a certain properties (i.e. auction properties)
Speak To Our Bridging Loan Experts
Sarah Stroud CeMAP
Nick Johns CeMAP
Sarah Stroud CeMAP
Nick Johns CeMAP
Sarah Stroud CeMAP
Nick Johns CeMAP
Sarah Stroud CeMAP
Nick Johns CeMAP
How Do Bridging Loans Work?
A bridging loan is a short-term loan that’s designed to “bridge the gap” between the purchase of a new property and the sale of an existing one. Therefore, this type of loan is typically used when a borrower has found a new property they want to purchase but hasn’t yet sold their existing property or they need to use the funds from the sale to complete the purchase.
In terms of how bridging loans work, they are secured against the borrower’s current property or the new property they are purchasing. Therefore, this means that the loan can be used to cover the deposit for the new property or the full purchase price. If required, you can also use a bridging loan to pay any associated fees such as legal fees, valuation fees and stamp duty.
With regards to repaying a bridging loan, it’s usually repaid in full when the existing property is sold but some borrowers may choose to repay the loan earlier if they can.
What Can You Use A Bridging Loan For?
A bridging loan can be used for the purchase of property, refinancing, renovation (such as a home extension), short-term capital or even to downsize. However, to qualify for a bridging loan in the first place, you’ll usually need a deposit to put down (typically around 25%).
How Much Does It Cost?
Bridging loans can be more expensive than traditional mortgages due to the short-term nature of the loan and the higher risk involved for the lender.
Therefore, you can expect to pay higher interest rates as well as additional fees.
In terms of how much a bridging loan costs, it’s usually around 1 to 2% of the loan size but it all depends on your personal circumstances. On top of the arrangement fee, you’ll need to pay the monthly interest rate, valuation/survey fees, legal fees, broker fees as well as any other associated admin fees.
With regards to the interest rate of a bridging loan, it’ll fluctuate depending on the following factors:
- Your loan-to-value ratio (LTV)
- The amount you wish to borrow
- How long you intend to borrow the money
- Condition of the property and your plans
- If its a regulated or unregulated loan
- The property’s location
- Your credit history
It’s worth noting that if you are unable to repay the bridging loan on time, you may face additional charges. Therefore, borrowers need to have a clear exit strategy in place before taking out a bridging loan such as selling their existing property or refinancing onto a traditional mortgage.
How Can I Get A Bridging Loan?
If you fully understand the nature of a bridging loan and want to get one, you’ll want to get in touch with a broker such as ourselves. As long as you qualify, they are easy to set up and we’ll be able to guide you through the entire process and ensure you get the best deal available at the time.
Bridging finance can either be secured against an existing property or used to pay for properties bought through auction or to pay for renovations before occupation.
Our Bridging Director has many years of experience and can help assist you with any query you may have regarding bridging. Our lenders appraise each application on its own merits, which means even if you have exceptional financial circumstances, our options will be tailored to suit you.
For further information regarding whether or not you qualify for a bridging loan, get in touch with one of our mortgage brokers today.