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A bridging loan is a type of fast, short-term secured borrowing which allows a buyer to move quickly when they need to. They’re “secured” for the lender – usually against the value of a property: either a property already owned, or the one being purchased. Or sometimes a “charge” is taken out against both properties to achieve the loan-to-value (LTV) ratio you need to minimise the cost of your borrowing. That’s why they’re faster to set up than long-term mortgage finance. It’s much quicker to establish the value of a bricks-and-mortar asset, than to verify employment status, income and affordability, and credit ratings. How much can I borrow – for how long? Bridging loans solve problems for buyers because they offer: Loans from £25,000 upwards Up to 70% of the value of the property (sometimes more, on investment properties, or in particular circumstances) Flexible loan terms, from as short as one month, or up to a year for a home loan (which may be extended) Or up to 3 years on commercial / investment properties Although bridging loans generally have higher interest rates than longer-term mortgages they can be used more flexibly. You can get a bridging loan for a property that is: For residential or commercial use Considered “unmortagable” Only going to be owned for a short period of time And there’s help with managing the cost of bridging loans: Interest can be “rolled up” and paid at the end of the loan term to avoid additional monthly payments Low arrangement fees are usually around 2% of the total capital borrowed. HOW QUICKLY can I get a bridge loan? This will depend on what you’re trying to do. Buying a residential property for your own use is a “regulated” transaction. The typical completion time of a regulated bridging loan can

The UK’s decision to leave the European Union has placed a great deal of uncertainty on Britain’s economic future.   No doubt, this will lead one group of investors to prosperity whilst causing serious grief for another, particularly where the property market is concerned.  To call Brexit a potential dividing line between financial success and failure for the many different types of UK property investors and UK property developers is something of an understatement, particularly where the UK housing sector is concerned. Of course, whether the Brexit vote results in a dramatic win or a substantial loss from your own perspective will ultimately be decided by which side of the fence you have found yourself on. Recently, the Nationwide building society published a report that indicated another fall in UK house prices with most properties experiencing a drop in value of around 0.4%.  This is the largest monthly fall in half a decade and the second drop within two consecutive months. The blame for this has been directly linked to higher inflation and a notable fall in consumer spending, which have also combined with Brexit, along with a drop in GDP to make matters worse for UK homeowners.  Of course, this is not the ideal scenario for anyone looking to secure the public vote in the next election. Both Sides of the Coin The fact that house prices are falling is particularly concerning, especially when one considers the fact that UK mortgage rates are still at an all-time low.  With UK unemployment also at a record low, most experts would predict that the housing market should be boosted in strength with prices steadily on the increase. However, this is not the case and this has meant that a large percentage of property investors and homeowners have had to sit back whilst their valued

Debt Consolidation Loans If the thought of debt consolidation loans leaves you somewhat confused and bewildered, scratching your head and in search of meaningful answers then you are definitely not alone.  It’s a sad fact that the vast majority of us are simply unable to get from one week to the next without some type of borrowing or credit line, whether it’s a mortgage, a string of credit cards, unpaid items from the catalogue or even a dreaded payday loan. Of course, when you break it down to the simplest level, there are basically two types of debt that most of us get into.  These are the debts we can realistically afford to repay, and the debts that have seemingly spiralled way beyond control that we simply don’t stand a chance of paying back on time. What is a Debt Consolidation Loan? Debt consolidation loans are a relatively new type of borrowing product aimed at reducing your monthly outgoings by lowering the interest rate on existing credit and extending the repayment period as an additional means of helping you budget.  With debt consolidation, the idea is to simplify life without causing any unnecessary confusion. As a useful example, let’s consider an employee at a bank who has taken out a personal loan, makes regular, and sometimes unauthorized, use of his overdraft facility and also has a couple of credit cards that he likes to use to keep himself afloat until the next pay cheque arrives.  With these three credit lines alone, our friend at the bank has a total of four finance products to juggle around each month and the interest rate and charges are an additional burden that he has to deal with. With a debt consolidation loan, it would be easily possible to pay off the overdraft, settle

The Bank of England had waded into the rather heated debate regarding the long-term mortgage products many lenders are now offering. There’s been a distinct rise in the number of banks and building societies offering 30-year and 35-year mortgage repayment. Though supposedly to help bring down the monthly costs of repayment, the BOA warned that longer mortgage terms do little other than “store up problems for the future”. One of the biggest issues highlighted in the report was the way in which longer mortgage repayment periods could have a huge impact on the pension savings of borrowers. By extending mortgage repayments into old age, it becomes necessary to meet them with retirement funds which may already be stretched to their limits. But what was interesting was how the report didn’t highlight the way in which longer mortgage repayment periods also mean massively higher overall interest payments for the borrower. In the UK, mortgages have been offered with a standard repayment period of 25 years for several decades. However, as house prices continue to rise, borrowers have been seeking realistic ways of bringing down monthly mortgage bills, in order to get on the housing ladder. In response, banks are now routinely offering repayment periods of up to 35 years. But in doing so, the overall costs payable by the borrower skyrocket. Take for example a smaller loan of £100,000, charged at a rate of 4.5% with an initial charge of £500. Over the course of 25 years, monthly repayments would be around £556 and the total amount payable would be £167,250. By contrast, up this to a 35-year mortgage and while monthly payments are reduced modestly to £473, the total amount to repay increases to £199,250 – an increase of £32,000 and double the amount borrowed. In the case of a larger loan,

A Brief Insight on Secured Commercial Loans and Unsecured Business Loans If you are thinking of starting up a new business, or you are looking to expand an already successful corporate enterprise, the chances are that you will get absolutely nowhere and at light speed if you do not have access to the required type of financing you need. When trying to source suitable commercial finance, an applicant will typically achieve funding by means of at least one, but sometimes multiple, business loan(s).  When the time arrives, the borrower will ultimately be required to decide on whether to apply for a secured business loan or an unsecured commercial loan product. With this in mind, we need to understand the main differences between these two types of finance so that we can make an informed decision and take the most logical route. What are secured loans for business? A secured business loan is a long-term borrowing product that is available exclusively to applicants who are able to offer some type of collateral as security against the sum being borrowed.  In most cases, this type of finance is usually secured on a property or suitable commercial assets.  Although the borrower will typically use a commercially owned building or business asset as security, there are cases where secured business loans are taken out against an applicant’s home or primary residence. Provided you are entirely certain that you can pay the loan back on time, and in line with the terms and conditions set out in the agreement, a secured loan is often the most affordable type of financing available to the modern business borrower.  As the loan is secured against an appropriate property or business asset, the rate of approval is generally exceptionally high and your personal credit history and company finances will not be scrutinized

It’s not uncommon for buy-to-let investors to set their sights on properties in need of repairs and refurbishments. The reason being that as competition for such properties is relatively low, they can often be picked up at rock-bottom prices. After which, the repairs and refurbishments can be performed at an equally low price, before turning a profit on the property by letting it out to tenants. Unfortunately, targeting properties in need of renovations or refurbishments can lead to problems with financing the purchase. This is because the vast majority of traditional lenders will only issue mortgages against properties that are considered habitable at the time of the application. Even if you can demonstrate your intention and capacity to renovate the property after the purchase, you’re unlikely to qualify for a traditional mortgage. In addition, landlords often seek to expand their buy-to-let property portfolios by purchasing homes at auction. Some in need of repair, others perfectly habitable. In both instances, however, it is usually necessary to pay the full purchase price of the property (and any additional fees) within 28 days – sometimes sooner. Needless to say, this is nowhere near enough time to organise a traditional mortgage. Combined with the increasingly restrictive lending criteria of major banks for buy-to-let landlords, all of the above places prospective investors in a tricky position. A Flexible and Accessible Alternative This is precisely why bridging loans are fast becoming the new top choice for buy-to-let investors. A dynamic and flexible type of secured lending, bridging finance goes far beyond the limitations of traditional High Street mortgages. For one thing, most bridging finance specialists are uninterested in the condition of the property. Even if it is in a pretty sorry state of repair, it is of no real consequence to the lender.  Instead, the only thing that