Bridging Loans & Finance for Your Residential Property

Residential Bridging Loans

Property deals notoriously move fast, so the time window to get financing for the property of your choice can be quite short. Choosing a residential bridging loan can be just the solution you need in the short-term.

Here at Pure Property Finance, we specialise in residential bridging loans tailored to your requirements. Our team of experts collaborate with specialist lenders to secure the terms and rates that would work best for you, all in a speedy manner to ensure you can act confidently.

What is a Residential Bridging Loan?

A residential bridging loan is a finance solution secured against residential property assets. It can be used to bridge the budget gap between buying a new home and selling your current one. Bridging finance is also used in more specialist cases, such as auction sales, and bankrolling urgent repairs to an existing property.

These types of loans aren’t limited to homeowners either. Residential bridging loans can serve property investors and developers looking to grow their business when they need funds quickly.

Residential vs Commercial Bridging Loans

While residential and commercial bridging loans are a similar type of financial product, the main difference between them revolves around who can access them.

Commercial bridging loans are secured against business assets or commercial premises specifically, while residential bridging loans are limited to properties dedicated to residential use exclusively.

How Does a Residential Bridging Loan Work?

Bridging loans for residential investment properties typically work by offering customers a lump sum of money as a short-term loan. The repayment period normally spans between one and 18 months, though some lenders might provide open residential bridging loans with no fixed repayment date.

Typically, bridging finance is arranged as an interest-only loan, meaning your monthly instalments will go towards repaying your interest, before you repay the lump sum at the end of the term.

Regulated bridging loans, such as a bridging loan to buy a house for yourself and use it as a primary residence, are subject to Financial Conduct Authority (FCA) criteria.

The Advantages of Residential Bridging Finance

Residential bridging loans come with various benefits, such as:

Expedience: As opposed to their traditional counterparts (mortgages), funds for residential bridging finance can be released within days.

Flexibility: In addition to taking out a bridging loan to buy a house, you can use these short-term bridging loans for refurbishments, or to avoid breaking a property chain.

Short commitment: With a residential bridging loan, you’re tied in for a shorter term than if you take out a traditional mortgage, while still receiving the funds you require for your financial needs.

Penalty-free early repayment: Many lenders will have flexible repayment options for their residential bridging finance solutions, so you can return the whole sum early without being penalised.

Whether you’re looking to upgrade or downgrade the size of your home, or putting money behind residential investment properties, a bridging loan to buy a house can quickly solve funding problems.

Who is Eligible for a Residential Bridging Loan?

Residential bridging finance is a suitable solution for various customers, from first-time buyers who are buying a house under time constraints to homeowners who need extra funds before they’ve completed the sale of their property.

Those shopping for residential investment properties at auctions, investors expanding their portfolio, and developers needing financing for conversions or renovations can also benefit from a residential bridging loan.

Bridging loans may be suitable if you are:

1. Purchasing a property at auction and your mortgage is unlikely to come through within 28 days.
2. Purchasing a new home, but haven’t managed to sell your current residence yet.
3. Renovating your property before refinancing at a later date.

Whether you’re eligible for a bridging loan to buy a house will depend on the property you’re offering up as security, as well as your credit history, how you plan to use the loan, and your exit strategy. Regulated bridging loans also have consumer protection requirements that need to be met.

Can Bridging Loans Be Used for Renovation or Refurbishment?

The short answer is yes. In fact, a residential bridging loan can be a very efficient way to bankroll any renovations needed to your property – whether that’s your current home, a house you’ve recently purchased, or a residential investment property.

With bridging finance, you’ll have the capital in your bank account when you need it, without the lengthy delays associated with more traditional lending pathways. That way, you can get on with refurbishment right away. This is especially useful for developers looking to sell or refinance the property once it’s had a facelift.

How Long Does It Take to Get Funds?

The quick turnaround is one of the biggest selling points of a residential bridging loan. Often, you’d be able to access the funds you need within one to two working weeks. The speed will depend on paperwork completion, valuations, and legal checks.

The Pure Property Finance team takes a proactive role in ensuring your application moves as swiftly as possible. Our extensive experience in handling complex cases, combined with our direct access to a list of lenders, means we’re able to streamline much of the process.

Why Choose Pure Property Finance for Your Residential Bridging Loan?

We appreciate that speed is of the essence when taking out a bridging loan to buy a house. That’s why we have a wide panel of lenders to choose from, so we can source the right solution for you. What’s more, we’re always transparent about the process, sharing updates with you throughout.

Our expert team can offer tailored advice on both unregulated and regulated bridging loans. We can support you with purchasing residential investment properties, as well as taking out a commercial bridging loan if that’s more appropriate.