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BridgingHub.com
Hub FS Limited
11 Shannon Court
Thornbury
Bristol
BS35 2HN
Bridging finance is a short-term loan, secured against your existing residential, buy-to-let or commercial property. It's particularly useful for when you need to buy a property or raise funds quickly.
Many people take out a bridging loan to avoid losing out on a property purchase due to a chain break. Or where there's a lot of buyer interest in a property and you need to move fast to secure it. Below market value (BMV) property purchases are a good example of this.
A bridging loan is secured against one or more properties you own.
Interest is usually rolled up into the loan and paid at the end of the term, or sooner if the bridge is settled early. As such, there are no monthly interest payments required.
There's two types of bridging loan: open and closed.
A closed bridging loan is one where there is an expected repayment date. For example, if you've agreed a completion date for the sale of a property, the proceeds of which will be used to clear the bridging loan. How the bridging loan will be paid off is known as the exit strategy.
You can pay off the bridging loan at any time after the first month, usually without penalty.
With an open bridge, there's no set repayment date, the loan just needs to be paid off by the end of the term. As open bridging has higher perceived risk for the lender, interest rates to be higher.
Yes, it's entirely possible to get a bridging loan with bad credit.
The short-term nature of bridging finance means that, compared to regular mortgage finance, your credit history is less of a factor in the lender's decision.
So even if you've missed mortgage payments, gone through an IVA, or been made bankrupt previously, it shouldn't be a barrier to being offered a loan.
Yes, we can source second charge loans potentially up to a maximum of 100% LTV with additional security. We have access to a huge panel of specialist residential and commercial property bridging lenders for both regulated and unregulated second charge lending.
Regulated bridging loans have a maximum term of 12 months, though it can be possible to re-bridge. Most bridging loans have a maximum term of 12-24 months, but it may be possible to secure a deal for 36 months, depending on the circumstances.
Yes. Many bridging lenders have no early repayment charges (ERC). So you can clear and exit the loan as soon as you want. Most lenders specify you must pay at least the first months interest charge.
One of the advantages of bridging finance is it's usually much quicker to arrange than a traditional mortgage.
We can obtain a lender decision in less than 24 hours. Sometimes, the same day. Funds can be available to draw down in as little as one week, though three to six weeks is more common.
Bridging loans are incredibly flexible and can be used for a myriad of reasons.
Apart from preventing property chain breaks, bridging can be used to buy property at auction, to fund a below market value purchase on a short completion deadline, or to purchase and refurbish a non-mortgageable property.
It can also be used to raise funds for business investment, a tax bill or any other legal use.
For security against the loan, lenders accept, subject to valuation, any type of UK residential, btl or commercial property. They'll also accept part-built properties under construction regardless of the condition.
Bridging finance can also be secured against land, either with or without planning permission.
Yes. Either with or without planning permission.
A Bridging loan is classed as 'Regulated' if the borrower or a family member lives in (or intends to live in) the property on which the loan is secured.
An unregulated bridging loan is one where either the property it's secured against, or the intended purchase property, is used for business purposes. For example, a Buy-To-Let property.
There are three main options:
The first is to roll-up the interest into the loan. There are no monthly interest payments to make. You simply pay off the loan, fees and accumulated interest as a lump sum when you exit the bridge.
A major benefit of this option is it keeps your cash free for development work or other property projects.
Retained interest is very similar, except the interest isn't compounded month-on-month, so is slightly cheaper overall than rolled-up interest. The total interest amount for the loan term is deducted from the gross loan amount and cleared along with the loan and fees upon exit.
The third option is serviced interest payments. This is where you pay the interest on the loan each month, just like you would with a standard interest-only mortgage.
This can make the overall cost of the loan cheaper. The downside, of course, is the negative impact on cash flow.
Our specialist brokers can secure you a fast and flexible bridging loan to finance a property purchase and/or redevelopment.
For purchasing a home under the hammer until you can line up a mortgage or sell the property on.
Seen the perfect property to downsize to but not sold your current home? Bridging finance can allow you to buy before you do.
A fast, regulated bridging loan can prevent a home purchase falling through due to a break in the property chain.
An established builder approached us to work with him on an auction purchase.
Working closely with him up to the bid day, we established a credit line on one of his unencumbered investment properties that allowed him to bid on the derelict uninhabitable rural property.
Our client was successful in their offer, and we were able to complete the loan under the auction conditions in 20 days.
Loan value: £200,000
Our client started development of a ground up build intending to fund from a personal inheritance.
Probate stalled and he needed to bridge funds to complete the build. Timescales were tight as the builder needed payment for works completed and to have comfort funding in place.
Working with the client, the builder, their legal team and our development finance team, we were able to secure funding to ensure the build continued to timescale. Extensive information was needed as the build was part complete.
Total funds raised: £530,000
An experienced developer secured planning for a location situated on a single title site he owned personally.
The site needed to have titles split before development funding could be secured.
Working closely with the client and his legal team, we were able to secure funding to split the titles and obtain a development funding line.
Total funds raised: £1.9 million
An experienced businessman had been a customer of a leading high street bank for over 20 years.
The bank decided to revaluate their lending criteria and requested settlement of secured property loan.
The client was in the middle of restructuring several investments and approached us for help to settle the lending in place.
Working with a specialist lender we were able to put in place funding before the deadline, agree settlement with his bank and create additional funding for the client to invest in other businesses he owned. As a result, the client was able to exit the bridge early and has been able to sell the commercial warehouse without bank pressure.
Loan size: £348,000
A serial property developer needed funding for a complex dual security development deal. The client needed to purchase a Scottish care home with no planning.
The lender required additional security and an English based semi commercial property - with expired EPC's was used. The deal was further complicated by outstanding deed amendments as the client's ex-wife still on the title.
Our case management team ensured documents were collected and hand delivered in order to secure time-critical funding.
Total funding secured: £2.4 million
A family had owned three separate residences on one title of which two were rented out. Their current lender refused to help restricting the fund-raising opportunity on the residence.
They approached us to clear the first charge lender so that the title could be split into three and refinancing obtained.
Total funds raised: £400,000
Graham Cox is the founder and director of Hub FS Limited which trades as BridgingHub.com. Based out of Thornbury, South Gloucestershire, Bridging Hub is a a specialist finance broker sourcing both regulated and unregulated bridging and development finance products for clients all over the UK.
Graham is often called upon for mortgage market commentary and analysis, and has been featured in The Guardian, FT Adviser, Telegraph, Evening Standard and many other publications. He's also appeared on LBC, BBC Points West and BBC Radio Bristol.
