Bridging Loans in Wales
GPS Financial are property finance specialists based in Cardiff, providing a variety of bridging finance options throughout Wales and the UK.
Bridging loans are ideal for securing the perfect property, while you wait until you can secure finance from other sources.
They are designed to ‘bridge’ the gap between a property purchase and traditional mortgage and are used extensively throughout Wales.
Bridging loans are used in a number of ways.
- Secure a property while another is being sold
- Purchase property while a traditional mortgage is being arranged
- Purchase a house at auction
- Buy a development property that wouldn’t qualify for a standard mortgage
Bridging loans are short-term finance to help secure property within a fast-moving market.
If you have found the perfect home or investment in Wales and don’t want to miss out, a bridging loan can help.
Who can use Bridging Loans?
Anyone that passes an affordability test can use a bridging loan. They are more expensive than a traditional mortgage and are designed purely as short term finance.
You can typically borrow up to 75% LTV (loan to value) on a property to a maximum of £25m.
Open bridging loans don’t have a set repayment date but will have a maximum term, typically 1 year.
Closed bridging loans have a set repayment date, typically after completion of sale or when a development would qualify for a mortgage.
What is Bridging Finance?
A bridging loan is a type of short term funding that enables you to bridge the gap between the purchase of one property and the sale of another.
It is an alternative to a second-charge mortgage, as it does not require a valuation or credit checks.
The lender provides the funds to the borrower upfront, which can be used to cover the cost of buying, renovating or repaying existing mortgages until the property is sold, typically within 12 months.
Bridging loans are typically taken out by property developers, investors and homeowners who need access to fast funds in order to complete a transaction.
They are usually secured against both properties and should always be arranged with a qualified financial advisor.
Bridge finance can provide much needed relief for borrowers who may otherwise struggle to secure traditional financing, but it should always be used with caution due to its high interest rates.
What can Bridge Loans be used for?
Bridging loans are an advantageous way to finance a property purchase or property development without having to wait for long periods of time.
Bridge loans provide a convenient source of funding for those who need to buy a property quickly and can’t wait for traditional loan approval.
They are typically short-term loans that provide the necessary funds to complete the purchase quickly and easily.
Bridge loans can be used for a variety of purposes including:
- Commercial Bridging Loans
- Bridging Loan Property Purchase
- Bridging Loan for Property Development
- Regulated Bridging Loan
- Auction Bridging Finance
- Bridging for Refurbishment
- 100% Loan Top Value (LTV) Bridging Loans
A few examples of this could be, buying a new home, refinancing existing mortgages, covering legal fees associated with purchasing property, and making improvements on existing properties.
These types of loans often come with a higher interest rate than traditional mortgages due to their short-term nature but they can be incredibly helpful in allowing buyers to act fast when buying property.
Furthermore, bridge loans often have fewer restrictions than traditional financing options which makes them attractive for those who may not qualify for standard loan products.
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How much can I borrow through Bridging Finance?
Bridge finance is a short-term loan that allows borrowers to access funds quickly and easily.
The loan amount of bridge finance available will depend on the lender’s Loan-To-Value (LTV) ratio, which is based on the value of the property being used as collateral.
The valuation of the property will determine how much you can borrow through bridge finance; typically, lenders will provide up to 70% LTV, meaning that you can access up to 70% of the value of their property.
The exact amount will vary depending on the lender’s criteria and your specific circumstances.
What are the alternatives to Bridging Fianace?
Alternatives to bridging finance vary depending on the situation. If you need short-term finance, you could consider a business overdraft, which is a flexible loan from your bank that allows you to borrow money up to an agreed limit.
Another option is taking out a personal loan, which can be convenient if you have creditworthiness and need the funds for business purposes.
If you’re looking for something more long-term, then a commercial mortgage might be an option as it offers competitive rates and repayment terms.
Alternatively, if you have assets such as stocks or bonds that can be used as collateral, then using them in a secured loan may be a better choice than taking out a bridging loan.
Lastly, venture capital or private equity can also provide funding but usually comes with restrictions on how the money should be used and when it needs to be repaid.
Why choose GPS Financial
GPS Financial was established in 2013 to put an end to the burden that comes with managing the paperwork and misinformation related to mortgaging your property. We will take care of it all, so you can relax while we search for the most suitable financial option for you.
GPS Financial are a friendly team of specialised brokers with decades of combined experience, access to all the leading lenders ensuring you receive the best possible value and the best possible service.
GPS Finanacial are award winning property finance specialists based in Cardiff, taking home the award for Best Firm: Bridging & Commercial in 2022, selected by Dynamo for Intermediaries, one of the countries foremost Mortgage Clubs.
If you’re considering a bridging loan in Wales, contact GPS Financial today, fill out the contact form at the top of the page and one of our financial advisors will get back to you.