How to ditch the property chain without ditching your next home

Friday, 31st March, 2017
bridging finance

How many times have you – or people you know – been affected by the dreaded breakdown in a property chain?

Unpleasant, right? Particularly if you’re weeks (if not months) down the line and have all but physically moved in to what you hoped would be your next new home.

The good news is that personal bridging loans provide a way in which to beat the housing chain and reduce your exposure to any last minute nasty surprises.

At the current time it’s not a method that is commonly used as a way in which to ‘bridge the gap’ – and not for any particular reason other than most people don’t really know about it. Or, if they do, they tend to feel that it’s out of their reach. Well it isn’t, and here’s why.

What is bridging finance?

Chain breaking bridging finance solutions represents a fantastic route to keeping on track when it comes to buying your next property.

A bridging loan is essentially a short-term finance arrangement that enables people to complete the purchase of their property even if they’ve been let down by their buyer.

As you might expect, the rate of interest is typically higher – but if you’ve already invested time and money in a process that’s got you right to the finish line, you might be reluctant to throw the towel in.

Can I get a bridging loan?

Landlords and amateur property developers, including those who purchase at auction and need quick access to finance after grabbing a bargain, generally use a short-term bridging loan. However, it has become more popular amongst the general public given the tightening of regulation around lending, and the longer waits for lenders to approve a mortgage application following the introduction of more stringent frameworks around mortgage lending.

Is there an age limit for bridging loans?

People are now living longer than ever before, and with that comes the understanding that people over 75 may also need access to bridging finance, too. However, restrictions on lending has also meant that mainstream mortgage products are more difficult for the elderly to secure, which is why bridging is a useful route to finance.

Interestingly, the rules that restrict the lending of traditional mortgages to those of a certain age do not apply for bridging loans, as interest payments are deferred until the loan is redeemed when the sale finally takes place.

Other than that, anybody is able to apply for bridging finance.

Do your research – and use a broker

As with most mortgages and finance products, much depends on the individual applicant. If you’re considering applying for a bridging loan or are wondering if bridging finance is the right option for you, simply give us a call.

If you have decided on using a broker, then one important piece of advice I’d like to offer is to always use one that is Financial Conduct Authority-regulated – like Complete Mortgages – as bridging loans are a niche product and may not be suitable for everyone.

Interested in something other than bridging finance? We also specialise in buy to let mortgages, first time buyer mortgages, sub prime mortgages, equity release mortgages and self build mortgages. Call us on 01483 238280 or email info@complete-mortgages.co.uk to find out more.

Commercial and bridging loans are processed through our subsidiary company, Complete Mortgages Property Limited.

By Mark Finnegan, Director at Complete Mortgages


Bridge that gap with a finance deal that works for you

Monday, 28th July, 2014

The property market is booming. Lending is up, which means that demand for finance is growing, too. Not only that but there’s currently huge demand for property combined with a limited supply.

But what does this mean for those looking to move? Quite simply, you need to be quick if you’re going to buy your dream home.

Either that or you need to have access to enough finance to put you in a strong enough position to compete with those who are looking to buy the same property and who may have already sold theirs.

So, what do you do when you have a very short window to buy and haven’t yet sold your property? Or you’re looking to buy a property at auction and need access to auction finance? Equally, if you’re a property developer looking to finance your next project what is the solution?

The answer, it seems, is bridging finance. Not just from the surge of enquiries we’ve received over the last few months but the Association of Short Term Lenders has also reported a 39% increase in demand for short-term finance.

In April we welcomed in the Mortgage Market Review from the Financial Conduct Authority, which essentially stipulates that lenders have to conduct more checks before issuing a loan. The knock on effect has been that mortgage application wait times are up and the chances of securing a mortgage in time to buy your next property before it’s too late have been reduced even further.

As a Guildford mortgage broker with access to an array of specialist finance products we are able to shortcut the traditional route to arranging a mortgage. We’re also an independent mortgage brokerage and full members of the National Association of Commercial Finance Brokers, which means that we have access to exclusive rates that other lenders and brokers do not.

There is talk of interest rates rising at the beginning of next year and whilst this cannot be guaranteed, it is a likely scenario. In this case, the benefit of a short-term bridging loan taken out now would mean that you would know the interest payable from the moment the finance is made available to the point the loan stops*.

Are you looking to become a landlord and need finance for buy-to-let properties? Do you need to fund a new business project such as a B&B or even a hotel? Or are you planning on opening a new factory?

Regardless of your needs we think that we can help. And, with escalating property prices, increasing demand for property and growing consumer confidence as a result of property once again representing a good investment, my prediction is that short term lending is going to increase even further over the coming months.

If you’re considering taking out a bridging loan our advice, given how everyone’s needs are different, would be for you to contact us on 01483 238280 or email info@complete-mortgages.co.uk to find out how we can help you bridge that gap and get you to where you need to be.

For more information on bridging loans click here.

*Based on interest rates rising in January 2015 and a loan being taken out for the period ending January 2015.

By Mark Finnegan, Director, Complete Mortgages