Bridging finance for buy to let property awaiting sale

THE SCENARIO

Although bridging finance traditionally has a reputation for being expensive, it has become an increasingly popular form of property finance and has a number of helpful applications. Mortgage and sale delays are a frequently cited reason people give for needing bridging finance.

My client approached us after searching for an ‘award winning mortgage broker’ online. This case was a prime example of how clients are increasingly using bridging finance for buy to let (BTL) properties. My client needed financial advice on a property she was looking to sell; she already had a bridging loan against the property, but had not managed to sell this in time to repay the existing facility.

The flat was valued at approximately £450,000, with £250,000 of debt outstanding. If she could not arrange another facility, she would be forced to try and sell, meaning she would likely need to drop the price considerably.

OUR SOLUTION

By refinancing her bridging loan, we would be able to buy her more time to sell her property at a better price.

Some clients are put off by bridging finance because it seems expensive in comparison to standard, BTL mortgage finance. However, in certain circumstances, it can represent a much better deal. For my client in this case, selling her property at a reduced rate would have lost her a great deal more money than the cost of bridging finance over the next few months.

For loans between £100,000 to £1million, bridging finance is an incredibly fast option, and the rates are more competitive than they’ve ever been. There are many lenders operating in this market, meaning competition amongst lenders in high and there are fantastic and most importantly speedy deals to be had.

If you would like more information about the myriad ways bridging finance can be used, please don’t hesitate to get in touch and I would be happy to talk you through your options.

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