typical arrangement fees for bridging loans

#TYPICAL ARRANGEMENT FEES FOR BRIDGING LOANS FULL#

What if I have bad credit?Īs a Bridging Loan is an unregulated product, it’s more about the asset rather than the individual. The exit strategy could be anything from you selling the property at a higher price or you could be looking at adding significant value, refinancing the property and then paying off the bridging loan.

This is an important part of the Bridging Loan and is always a conversation we have right at the beginning of the process. The interest rates from a first charge lender are more preferable.Ī second charge is where the leftover money from the sale goes to the second charger lender, however, if the money that has been paid to the first charge lender has been used, then the second charge lender will lose out. Some are first charge and some are second? What does this mean?Ī ‘First Charge’ is when a property needs to be repossessed and needs to be sold off by the lender. However, if both legal teams are on the ball, particularly If there’s a set timescale, then there’s no reason why the Bridging Loan can be available in a couple of weeks.įortunately, with a Bridging Loan, it isn’t an elongated process due to what the nature of the loan will be used for, however, we will check with the lender to ensure they can fulfil the timescale required. The average is normally 4 weeks, but it can take up to 6 weeks in some instances. As a broker we have access to every single bridging lender available and providing you fit the criteria then we can get the ball rolling straight away. You can apply in a very similar way to other loans.

#TYPICAL ARRANGEMENT FEES FOR BRIDGING LOANS FULL#

If you don’t use the full period of the loan, the lender will write off the months that are not used and there are normally no early repayment charges. You also have interest on top of that like any other loan, however, the initial fees and interest are combined, retained and deducted from the gross loan so you receive a net loan. You have a fixed rate per month which is set over a period of time. The loan can be used for the onwards purchase and paid back once your house has sold as the loan will be against your new house purchase. You can also get a regulated Bridging Loan if you’re selling your current house, found a new one but not sold yours. When Bridging Loans are used in this manner the house is typically sold afterwards so the loan can be paid back in full. Auctions are usually the main reason these loans are used as the sale is normally completed within 28 days and a traditional mortgage does not allow you to do this.Īnother option is where you are developing or refurbishing a property and using a Bridging Loan can be used for a short term project.

Bridging loans can be used for a variety of purchases.

Typical arrangement fees for bridging loans