Everything You’ll Need to Get a Bridging Loan

Whether it’s for meeting transaction deadlines or you require chain break finance, sometimes you may find yourself needing finance fast. In this case, bridging finance could help – but do you have everything you need to meet lenders’ loan eligibility criteria?

Our Specialist Property Finance broker, Andrew Price (CeMap, DipFA), explains the typical bridge loan requirements here.

Can I Get a Bridging Loan?

Every lenders offer will be different when it comes to bridging finance, however there is a list of required information that generally satisfies the majority of bridging lenders in regards to the data they need to offer terms or issue an Agreement in Principle (AIP). This is as follows:

Background Details

Lenders will require a brief breakdown detailing what you are looking to use funding for. This should include the circumstances and the purpose of the loan.

Personal Details

As the applicant, a lender will require some basic personal details about yourself. This will include:

• Full name
• Date of birth
• Nationality
• Current address
• Residential status – owner-occupier/tenant/living with friends or family
• Income
• Employment status and details
• Borrowing entity – Ltd company/LLP/personal
• Other owned properties

Property Details (to be purchased or refinanced)

A lender will also require information on any property you intend on purchasing or refinancing using the loan. This will include:

• Security address
• Type of property
• Purchase price and property value
• Tenure – Freehold/leasehold

Please note: A lender may request some additional information, but this is treated on a case by case basis.

Loan Request Details

The lender will require details about the amount you want to borrow.

Generally, lenders will go to a maximum LTV of 75% of the gross loan amount. This includes any retained interest for the term of the loan and any arrangement or broker fees.

For example, on a property valued at £100,000 the maximum gross loan available will be £75,000. Therefore, the net loan amount (i.e. the amount the client will receive) will be £75,000 minus the retained interest and fees.

The lender will also ask how long you would like the loan for. Bridge loan terms are available from between 1 month to 18 months, however regulated loans will be capped at a maximum of 12 months. The bridge does not have to be held for the full term and can be repaid earlier, usually without any early repayment charge or exit fee.

Lastly, you will require an exit strategy. This is very important. A solid exit strategy can be the difference in obtaining a bridging loan or not. The exit is usually the sale of the property or refinancing on to a long term deal such as a commercial, residential or BTL mortgage.

Adverse Credit

At this point, it may also be beneficial to outline any adverse credit or concerns. The lender will learn this further down the line anyway, so it’s better to be upfront to avoid complications.

Learn More about Bridging Finance

If you are interested in finding out more about bridging loans and whether they might help you, then you’ll find a wealth of information on our Bridging Loans and Finance page. Or if you would prefer to speak to a member of our team, contact us today.