A retired client we work with at Enness had put his current residential property (which was in East Sussex) on the market for £600,000. It was unencumbered and did not have a mortgage on it. However, he wanted to purchase a new residential property for £500,000 before his other property had sold. The client was able to put down £100,000 of his own cash and therefore needed to raise a £400,000 bridging loan over a maximum term of 6 months.
I approached a couple of suitable lenders with whom I have a longstanding professional relationship. He decided to take a first charge against both properties to secure a lower loan to value (LTV). This meant that they could offer my client a more competitive bridging loan rate.
The debt was still to be repaid from the sale of the client’s current property but the inclusion of the second property meant that the lender was more confident in offering this rate. After having spoken to a number of lenders to try and push the cost down we eventually received a rate of 0.99% p/m with a 1% arrangement fee and no early repayment penalties. This bridging loan structure was a great temporary solution for my client.