Bridging Loan Lenders
If you’re looking for a bridging loan, either for personal or commercial use, finding the right lender is crucial. Comparing bridging loan lenders isn’t as easy as with more mainstream mortgage lenders, and knowing where to look may not be straightforward.
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What's in this article?
In this article we’ll take a look at a sample of bridging loan lenders to give you an idea of what to expect, and explain why actually you don’t have to worry about choosing at all.
How to choose the right bridging loan lender
This is one of the most important questions to ask yourself when you’re looking for bridging finance, but also one of the hardest to answer.
That is unless you use a broker. A bridging loan broker is a financial expert with specific experience of sourcing the best deals and terms on bridging loans. Using a broker cuts out all of the time and stress of researching and comparing bridging loan lenders, and it can also save you a significant amount of money.
What should I be looking for?
The criteria you will be looking for in a lender depends on what your needs are as a borrower. As well as looking at the different interest rates on offer, have a look at the following and how they vary:
- How much can you borrow? Not all lenders will have the same lower and upper limits.
- What term do you want to borrow the money over? If it’s a particularly long or short term then this may filter out some options.
- Are there any early repayment charges? Most bridging loan lenders don’t charge ERCs but it’s worth checking so that you don’t end up getting caught out.
- Arrangement fees - these are normally a percentage of the loan amount, but even tiny variations can mean significant amounts of money on large loans.
- How do you want to pay back the interest? Some products have no monthly repayments, charging interest either on a rolled-up or retained basis, while others will have a serviced interest model, where you pay interest every month.
Do I have to use a broker?
No, it’s not a legal obligation, but it’s a no-brainer when it comes to bridging mortgages as there are so many different products and lenders available and it’s a gruelling process to go through them all unless you’re already very familiar with the market.
You’ll also find that many lenders will only work through an intermediary, so without a broker you are already potentially closing yourself off to some of the best deals available.
To give you an idea of just how varied lenders’ terms can be, let’s take a look at a sample of bridging loan lenders. As you will see, each has different terms and eligibility criteria, so while one might be a good fit for one person or project, that doesn’t mean they’ll be a good match for someone else. A broker can assess your personal situation and quickly find the lender who is best suited to your needs.
Example bridging loan lenders
To help give an idea of the different options offered by bridging loan lenders, we’ve picked out some examples.
We’re not recommending any of these lenders over others, this is just to illustrate how comparing lenders isn’t always straightforward.
United Trust Bank
United Trust Banks offers both FCA regulated and unregulated bridging loans for a vast range of purposes, from £125k to £15m. Regulated loans can be for up to 12 months, and unregulated up to 36 months, and there is no maximum age limit or early repayment charges.
Interest is calculated daily, with no monthly repayments required. Their extra optional features include dual legal representation, automated valuations where applicable and a fast track process available for certain applications.
Octopus Real Estate
Octopus can offer bridging loans to buy a house, for refurbishment projects, buy-to-let purchases and commercial projects. Their regulated residential bridging loans are available up to a maximum 65% LTV and 12 month term or you can get an unregulated loan up to 70% LTV and 23 months. Monthly interest rates on both were 0.55% at the time of writing. (April 23).
They have a fast track service for loans of £50,000-£500,000 up to 70% LTV, with reduced legal due diligence.
MT Finance
Borrowers using MT Finance can apply for loans of between £50,000 and £10 million and borrow up to 70% LTV. You must be based in England or Wales to apply and be employed or self-employed.
MT Finance doesn’t carry out credit scoring and will take an individual view on each application they receive. You won’t be discounted on the basis of adverse credit histories including CCJs - they are more interested in the long-term potential of the property.
Clifton Private Finance
If you’re looking for a larger loan, Clifton Private Finance offer property bridging loans from £50,000 right up to £25m, with monthly interest rates from 0.45% pm at the time of writing.
Larger loans of £750,000+ can qualify for lower interest rates and they are terms of up to 36 months. LTVs up to 80% can be considered, or even up to 100% if there are other assets available as security.
West One Lenders
West One Lenders offer bridging loans for land purchases, residential project and commercial and semi-commercial purposes. They offer both regulated and unregulated loans as either 1st or 2nd charges and operate across England, Wales and mainland Scotland. They’ll consider LTV up to 75% and loans up to £30 millions, possibly higher in some special circumstances.
Conclusion
This article should have given you plenty of food for thought about the range of bridging loan lenders out there.
But if you’re feeling overwhelmed by the prospect of researching them then don’t worry, you don’t have to do it on your own!
Get in touch if you need some advice or guidance on the next steps to securing a bridging loan and our team of experts will be happy to help.
Ready to talk? Speak to an expert today: 0800 077 8980
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