A bridging loan is a type of short-term finance used to bridge the gap between the purchase of a new property and the sale of your current property.

This loan is a short-term loan that is secured against the borrower’s new or existing property and/or other assets.

The loan is usually taken out for a relatively short period of time, typically between 6 to 18 months, but you have the option to pay off the loan as quick as you like, if the funds become available for you.

The purpose of a bridging loan is to provide the borrower with immediate funding, which can be used to complete the purchase of a property.

Once the property has been sold, the loan can be repaid. 

Bridging loans are commonly used by property developers and investors who need to access quick and flexible finance to fund a property purchase.

How quickly can you get a Bridging Loan?

If you are in pressing need of funds to bridge the gap between two major transactions such as selling a property and buying a new one, a bridge loan might be your ideal solution.

So, how quickly can you get a bridging loan?

The answer depends on the lender you choose to work with and the documentation you have ready. 

Some lenders can process your loan application within a couple of days, while others may take longer.

In any case, you should have all the necessary documentation such as proof of income, value of the property, and equity readily available to speed up the process.

It is important that you do not rush into securing a bridging loan from just any lender, as you need to weigh your options and consider the interest rates and the loan terms carefully.

Make sure you do your due diligence and work with a reputable broker who can satisfy your financial needs within a reasonable time frame. 

How much does a Bridging Loan cost?

If you are looking to take out bridging finance, you will need to factor in the cost of the bridging loan, which can vary depending on the lender.

However, the cost of a bridging loan can be quite high compared to other types of loans.

The cost of the loan is typically a combination of fees and interest rates based on the loan to value, loan amount, and the duration of the loan. 

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, for example, a property is valued at £500,000, a borrower could potentially secure a bridge loan for up to £425,000.

It’s essential to find the best bridging lender who offers competitive rates to minimize the cost of a bridging loan.