One of our recent clients needed a bridging loan to allow simultaneous completion on the property he was selling and the property he was purchasing. We secured him a larger loan at a lower monthly rate than other brokers could offer.
My client in this instance was a property developer. He had bought a new main residence for £2m. Between exchange and completion, he had been allowed access to the property and had carried out extensive renovations. The work increased the value of the property substantially; once he had finished, it had a market value of £3m.
In order to complete simultaneously on the sale of his old property and the purchase of the new one, he was looking for a bridging loan of over £1m.
Within 3 working days we had an offer out for him. He had been speaking to another broker and, as well as being faster, our terms had a couple of significant advantages over the terms he had already been offered.
By persuading the lender to lend against the new market value of the property, we were able to nudge the loan to value (LTV) of the bridge down to under 50%. This meant our client was able to secure a larger loan than expected; we added £100,000 to the loan he had already been offered, meaning total borrowing of £1.4m.
This in turn meant we were able to knock 0.1% off the monthly rate the other broker had offered, bringing it down to 0.65% and thus making his payments cheaper.
All in all, a £1.4m bridging loan at 0.65% was a fantastic result for my client.