Bridge To Let Financing

At its most simple, bridge-to-let finance refers to bridging loans that fund the initial purchase of rental properties – usually those requiring refurbishment or, in some cases, further works. You might find it called a number of different things, but, by any name, it can be a convenient and cost-effective option for landlords or property developers taking on a new project.

The idea is an almost seamless transition from the specialist funding – the bridging loan – needed to secure a property ineligible for a standard mortgage, to its exit onto buy-to-let finance.

Sometimes people may not be completely confident with their existing refinance arrangements or want the option to retain a property on some longer-term finance once their bridging term has finished. We developed our bridge to let loans following discussions with some of our clients. They told us that while bridging loans are great on ‘day one’, they also wanted extra certainty that when the loan came to end, they would still have the added security of a finance option with us. So, we secured a product that gave them precisely that. Here’s how it works:

The first period of the loan is a bridging loan, without early repayment charges.

This is followed by a fixed term for a set period of time.

The rates are fixed on day one.

No additional underwriting is carried out when the bridging loan finishes, and the term loan begins.

Are you eligible?

Different lenders will have different eligibility criteria – a key example being whether or not they will offer bridge-to-let mortgages to first time landlords/developers. Some will have standard criteria, while others will take a case-by-case approach, usually based upon the nature of the project and/or the level of renovation required.

Other factors lenders will assess – in addition to a number of those you’d expect in a standard mortgage application – are likely to include: the current condition of the property, your plans for its refurbishment/development, the extent of work to be undertaken.

* Type of Lending Required

Bridge To Let Finance November 9, 2019