A bridging loan is a short-term loan used to buy or invest in property. These are typically up to 12 months in duration and are repaid when long-term funding is in place – which can be either a mortgage, or through the sale of the property or another asset. They are fast, versatile, short-term property loans used in all kinds of property transactions; from downsizing in retirement, to flipping properties for a profit, to buying property at auction. The use-cases are numerous and varied. For example, bridging loans are often used to buy a new home while you're waiting for your current property to sell - bridging your gap in funding.

Bridging loans can be arranged much faster than standard mortgages; however: • They need to be secured against property (this can be the property you're buying, selling, or both) • And you must have a verifiable repayment strategy in place (most commonly selling your existing property or getting a mortgage) As bridging loans are secured against property, the risks are relatively small to your lender. This means interest rates are fairly low compared to other types of short-term finance. Interest is calculated and charged monthly; however, if you can pay back your bridging loan early, you'll stop being charged interest on the same day you repay. For example, if you take out a 12-month bridge but find you're able to pay it back after 6 months, you'll only be charged 6 months interest. Interest can also be 'rolled up' within the loan, so you don't need to worry about monthly payments - instead, you can opt to repay the entire balance (loan and accrued interest) in one lump sum. Broadly, the main advantages of bridging finance are: • Large loan sizes: you can borrow up to 80% of the value of your property(s) • Speed: bridging loans can be arranged in as little as a few days in best-case scenarios • Flexibility: they can be used in a wide range of property scenarios In many cases, using a bridging loan can mean not having to rush the sale of your house while you buy a new property, and it can also allow you to move quickly in the property market and avoid missing out to cash buyers.

You can borrow up to about 80% of the value of the property you’re using as security. It's important to note that different lenders have varying policies and criteria regarding the maximum loan amounts they offer for bridging finance.  Additionally, the terms and conditions of the loan, including interest rates and fees, should also be taken into consideration when determining the overall affordability of the bridging loan.

You can get a fast bridging loan within a few days. However, not all bridging loans can be arranged this fast, and it depends on your situation and the properties involved. You will also likely need a broker to push an application through this fast, and it may incur additional fees from your lender and solicitor to expedite your case. On average, most bridging loans take between 3 to 6 weeks to arrange as a standard timeframe.

Every bridging loan lender in the UK has their criteria that a borrower has to fulfil to qualify for a loan. Whilst most lenders look for low-risk borrowers, many others have niche areas they specialise in and can facilitate.  As a rule, there are two essential criteria you'll need to meet: • You will need to have a form of security (or deposit for your bridging loan) - usually one or more properties or an asset that the loan can be secured against. • You will need to have a solid exit strategy to repay the loan. A lender will want to know how you will repay the loan by the end of the agreed term. In most cases, this is either be through selling the property, selling another property, or refinancing with a traditional mortgage loan. Since the loan is secured against property or other collateral, a lender won't need proof of income. Equally, your credit history won't affect an offer as long as any outstanding debts or adverse credit doesn't impact your ability to repay the loan. However, if you do have a bad credit rating, you may have to pay higher interest rates. Other basic criteria you will need to fulfil include: • Minimum age of 18 years old • You must use the loan to purchase or refurbish residential or commercial property • Live or have a registered address in the UK (UK expats are eligible for bridge finance in the UK) • Bridging finance is available to individuals and businesses. Loans can be set up for: • Private individuals • Limited Companies • Partnerships • Offshore companies If you have any questions about your eligibility for a bridging loan, speak to one of our advisors who will be happy to discuss your situation. It is fairly common practice to speak to a bridging loan broker for advice on taking out a bridging loan.  You can go direct to lenders, but not all lenders accept direct applicants. Also, most people use a bridging loan broker to guide them through the process, compare rates and get the best deal.

There is a range of different costs involved with bridging finance. The exact bridging loan cost will be dependent on the complexity of your case, loan size, and other factors. Here’s a list of potential bridging loan costs: • Bridge Loan Interest Rates • Valuation fee for any properties  • Legal fees  • Broker fees  • Facility/arrangement fees  • Drawdown fee  • Exit fees  The interest you repay on your bridging loan is calculated as a monthly rate instead of an annual rate, like with a standard mortgage. Because of the short-term nature of bridging finance, interest rates are usually much higher than a typical mortgage, but you only need to pay the rate for a much shorter period. Bridging loan rates are affected by several factors, including: • Your loan to value ratio (LTV) • How much do you want to borrow, and for how long  • The condition of the property and what you’re planning to do • Whether it’s a regulated or unregulated bridging loan • The location of the property • Your credit history