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How to Obtain a Bridge Loan for Your Property Development Requirements

    Bridge Direct     0

Property development can be an extremely profitable business, but it requires a lot of investment capital in order to start any venture. Acquiring these funds needs to be either planned with plenty of time in advance, or available immediately, otherwise it could be the difference between securing and losing a highly desirable property.  In these types of situation, this is where bridge loans can step in.

A bridge loan is a short-term funding solution, sometimes referred to as gap finance, and is a great way of securing funds quickly, helping to bridge the gap between selling the property or securing a longer term loan such as a bank loan or bank mortgage. The typical bridge loan duration would normally range from 1 to 12 months, however most lenders will offer the opportunity to extend period or sign a new deals for a new bridge loan.

Bridge mortgages are paid back in full at the end of the bridging term, generally when the borrower sells their current property or if receives funds from a conventional bank loan or mortgage. The funds for a bridge loan are secured against an existing property or asset the borrower has enough capital held in. This means that funds can be secured and transferred extremely quickly (in some case in the same day) and do not require the same rigorous credit checks and due diligence associated with normal bank loans or mortgages.

Bridge loan calculator

Bridge loans are by design a short-term period financial solution, and as with any short-term loan, they are likely to attract a slightly higher rate of interest when compared to a longer term financial solution. However, they do not restrict or tie the borrower into long term loan repayment scheme, nor do they attract the same early settlement fees and charges.

By using Bridge Directs instant bridge loan calculator, you can apply for a bridge loan quickly and easily on line, providing the necessary information. Once submitted one of Bridge Directs experienced decision makers will call you back at your convenience.

Using the bridging loan calculator simply specify;

 

  • How much amount you required
  • How much duration you want (in months)
  • Type of property you keep as a security
  • The value of the security property
  • If there are any existing mortgages or loans secured against the security property

 

When should you use a bridge loan?

Securing a bank loan or mortgage is becoming increasingly difficult, not only have set criteria’s increased in general, but more and more banks are increasing credit checks and general due diligence to ensure that the money they lend out will be returned. These increases (mainly due to the recent economic crisis), are not only causing a backlog of mortgages, but the rejection rate has more than doubled. It can now be common place to wait weeks or months to receive acceptance on a mortgage, let alone receive the funds.

With bridging finance it is completely different. Bridging is, by design, used to help secure funds quickly and easily. As the loan amounts are secure against existing assets, there are no length credit checks or due diligence required. Bridge Direct will also offer no set criteria, meaning that funding can be almost instant.

Bridging loans can also be applied to any business application, and are not just restricted to property purchases. More and more business are turning to bridge loans to help boost their liquid capital when they are awaiting payment of large supplier invoices, tax bills or looking to fund a new venture.

However, bridge loans are still an ideal asset when used with property purchases, particularly when buying at auction, where there are strict (and short) time limits on completing on purchases.

Who is eligible for a bridge loan?

Approval guidelines of bridge loans are much simpler when compared to conventional loan approval guidelines. Bridge Direct will give their guaranteed instant decision on all bridge loan applications. They accept 1st and 2nd charges, have no set criteria and you may still be eligible for a loan if you have bad or adverse credit history.

Bridging mortgages in the UK

There are hundreds of bridging loan firms throughout the UK, and this is steadily rising as bridging loans become more and more popular. However, generally most of these companies are brokers, as opposed to direct lenders.

By using a broker, as opposed to a direct lender (like Bridge Direct), you will not be given an instant decision, and will have to wait for them to contact their various lenders for deals. Added to this their fees and hikes in interest and a brokers loan can quickly become expensive.

About Bridge Direct

Bridge Direct was founded to help customers looking to secure short-term bridging loans in London, Manchester and throughout the UK. Bridge Direct has a substantial lending capital of over £12 million, and has more than 30 years of financial skills in mortgages and the financial sector and bridging loans.


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