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Bridging Loans for Self Build

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Bridging Loans for Self Build

The self build market is huge and growing steadily. If you want to build instead of buy, a bridging loan for self build properties from GPS Financial can help.

Bridging loans provide fast, flexible finance for a range of property needs. They are often used as a convenient bridge while you build to a habitable standard so you can apply for a residential mortgage.

They can also help secure land, develop an existing property and help finance extensive or large-scale renovations.

GPS Financial works with a carefully selected range of lenders willing to provide finance to individuals, companies, developers and investors who want to self build.

You can borrow between £25,000 to £25 million for periods of up to 18 months at very competitive rates.

Bridging Loans for self build properties

If you dream of self building for your family or as a business, you’re not alone. Thousands of people are building their own homes and we help finance them.

GPS Financial is an award-winning finance company that partners with leading UK lenders. We can source competitively priced bridging loans for self builds anywhere in the country.

We can provide a decision within days and finance within a week. Rates will be competitive and terms will be fair.

What is a Bridging Loan?

A bridging loan, also known as a bridge loan, is a short-term loan that is a type of secured loan, meaning that it requires collateral, usually the property being sold.

The loan amount is calculated based on the equity in the property being sold, and the rate of interest is usually higher than a standard mortgage.

Bridging loans are typically repaid within 6-18 months and are designed to be a short-term finance solution. 

The lender will consider the borrower’s income, property value, and the exit strategy when deciding on whether to approve the loan.

Exit strategy refers to how the borrower will repay the loan, usually by selling the existing property or through long-term finance.

Bridging loans are a type of short-term loan that enables finance to be arranged quickly, making them appealing to borrowers who need to act fast to secure a new property. 

However, borrowers must be aware that they will be paying higher interest rates and fees compared to standard mortgages.

How does a Bridging Loan work?

The lender provides the borrower with a loan amount that can be used to purchase the new property while the repayment of the outstanding mortgage on the current property is still being finalised.

Bridging loans can be used for residential, commercial, or self-build properties. To obtain bridging finance, the borrower needs to provide the lender with a detailed repayment plan.

The interest rates on bridging loans can be higher than those offered by traditional mortgage lenders, but the turnaround time is much quicker.

The borrower should always ensure that they find the best bridging loan for their situation and that they fully understand the terms and conditions of the loan before they agree to borrow. 

It’s also important to note that lenders often require a security deposit against the loan, such as the purchased property.

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How much can you borrow with a Bridging Loan?

The amount that can be borrowed with a bridging loan varies depending on the lender and the borrower’s creditworthiness. 

In general, lenders will offer a loan amount that is equivalent to a percentage of the property’s value, typically anywhere from 70-85%. 

This means that if a property’s value is appraised at £500,000, for example, a borrower could potentially secure a bridge loan for up to £425,000.

Typically, the amount that is lent is based on the value of the property being used as collateral. The lender will also consider the borrower’s credit history, income, and overall financial situation.

Before applying for a bridging loan, it is essential to do some research to ensure that you understand the terms and fees associated with this type of financing.

How do I get a Bridge Loan?

To obtain a bridge loan, you must first locate a lender or mortgage broker who specialises in this type of financing. 

The lender will evaluate your creditworthiness and ability to repay the loan before approving it. 

It’s crucial to understand the repayment terms of the bridge loan before accepting it, as these loans typically have higher interest rates than standard mortgages.

Once you’ve secured a bridge loan, you’ll need to repay it in full by the agreed repayment date, which is typically within six months to one year.

There are a range of bridging loans a broker can offer, this can include:

Speak to GPS Financial today, and see which one is the best option for you!

Do you require a ‘Regulated’ or ‘Unregulated’ Bridging Loan?

When it comes to bridging loans, borrowers have the option of either regulated or unregulated financing.

Regulated bridging loans are mandated by the Financial Conduct Authority (FCA) and offer protections for borrowers when purchasing residential property.

Unregulated bridging loans can be used for residential and commercial properties, but offer less regulatory oversight.

For those seeking financing for commercial property, an unregulated bridging loan may be preferred as they typically provide more flexibility and faster access to funds.

However, the borrower should be aware of the higher risks associated with unregulated loans, including potentially higher interest rates and fewer legal protections.

It’s important to choose a reputable lender who can provide guidance on which type of bridging loan is right for your specific situation. 

Ultimately, the decision between regulated and unregulated bridging loans should be based on the borrower’s individual needs and financial situation.

Why choose GPS Financial

Established in 2013, GPS Financial aimed to eliminate the challenges that come with managing paperwork and incorrect details that are linked to self-build mortgages.

We will take care of everything, so you can rest assured knowing we are looking for the most suitable financial solution for you.

Based in Cardiff GPS Financial is an award-winning property finance specialist, taking home the award for Best Firm: Bridging & Commercial in 2022, selected by Dynamo for Intermediaries, one of the country’s foremost Mortgage Clubs.

The team at GPS Financial is a team of dedicated brokers who have a wealth of experience in the industry. We have access to all the top lenders, guaranteeing you receive the most value and best possible service.

If you’re considering a self-build bridging loan or need assistance with development finance, contact the experts GPS Financial, fill out the form at the top of the page and one of our expert advisors will get back to you.

Why GPS Financial?

Leading property finance specialists
We remove the stress and the paperwork
Match you with the right deal for you
No case too big or too small