Residential Bridge Loans
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Residential Bridge Loans
Residential bridge loans are designed for residential or commercial property purchases, to ‘bridge’ the gap between standard finance.
They are ideal for when you need to act quickly, making them incredibly useful in our fast-moving property market. You could have a decision in hours and the funds within days, much faster than a typical mortgage.
GPS Financial are expert financial brokers with a track record of delivering fast, competitive residential bridge loans between the value of £25,000 to £25 million for periods of up to 12 months and up to 85% LTV.
What is a Residential Bridging Loan?
A residential bridging loan is a short-term loan that’s used by individuals for a residential property or by businesses for commercial borrowing to ‘bridge’ the gap until they can arrange a standard mortgage.
They are quick to arrange and are generally available up to 85% LTV (loan to value).
Bridging loans for residential property can be used to:
- Buy a property while yours is still under offer
- Support a chain break so you don’t miss out on opportunities
- Secure a new property while your mortgage is being arranged
- Purchase a property at auction
- Renovate or develop a property so it qualifies for a standard mortgage
If you need finance in a hurry for any property purchase, a residential bridging loan could help.
There are two types of bridging loans: open and closed.
An open bridging loan has no fixed repayment date. You can repay it any time within the defined period, usually 12 months. It offers the flexibility to adapt when timescales may vary but can attract higher interest rates.
A closed bridging loan has a set repayment date. You can repay early if you want to, otherwise you will need to repay the loan in full on the specified date. It offers the reassurance that you know exactly when the loan will be repaid, and often attracts lower rates of interest as there is less risk involved.
There is no ‘best’ option here, just the option that works best for you!
How can I get Residential Bridging Finance?
You can access residential bridging finance by working with GPS Financial.
We’ll work with you every step of the way to identify the best loan, the best lender and the best rate for you. We’ll even help you prepare the application, present it to the lender and do everything we can to ensure your success.
You will need to have a solid exit strategy and prove that you can afford the repayments.
The exit strategy is another term for repaying the loan. In the case of residential bridging loans, that’s usually repayment by a standard mortgage but it can be from other means too.
As long as you have a plan and the means to repay the loan, we can help you get residential bridging finance.
You can gain approval and access the funds in just a few days, although it can be faster if time is a deciding factor.
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How is interest charged on a Residential Bridge Loan?
A residential bridge loan can differ slightly from a standard mortgage as it charges interest on a monthly basis rather than daily.
Rates can be anywhere from 0.4% up to 3%, but this will depend on your circumstances, the lender and the amount.
For illustrative purposes, here is an example of how much a residential bridge loan could cost:
If you borrowed £400,000 as a residential bridge loan at 75% LTV and 0.5% monthly interest, you would pay £9,000 in interest over 6 months.
As bridging loans involve arrangement fees, typically around 2% (£6,000 in this example), the total cost for the loan would be £15,000 for those 6 months.
Of course, the full cost of the loan depends on several factors, and you may also need to pay property valuation fees.
Speak to an expert from GPS Financial to understand how a residential bridge loan could work for you.
Bridging loans for residential property are not cheap forms of finance but nothing comes close to the convenience they offer. Where it could take a month or more to arrange a residential mortgage, it can take mere hours to arrange a residential bridge loan.
Why work with GPS Financial?
Based in Cardiff, the team at GPS Financial has a long history of providing expert assistance on property finance to individuals and businesses.
We are expert financial brokers that specialise in all kinds of bridging loans and will work with you to assess your needs, your situation and your options to find the best deal for you.
Using our decades of experience and large pool of leading lenders, we can help you get a competitive rate for your residential bridge loan that suits your circumstances.
If you need fast finance between £25,000 to £25 million for periods of up to 12 months and up to 85% LTV, get in touch with us today.
GPS Financial is authorised and regulated by the Financial Conduct Authority.
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