Refinancing a bridge loan on first-time buyers’ London property

THE SCENARIO

In the fast moving London property market, borrowers sometimes find it necessary to procure short term finance to secure a property. I recently helped some first-time buyers—a couple in their mid-twenties—with refinancing a bridge loan they had used to purchase a £475,000 flat in Balham.

When my clients were initially applying for mortgages, lenders were not willing to consider them because one of the clients was self-employed and had shown a loss in the year before. Both incomes were required for affordability, so this posed a problem. The same client had taken up an option of a permanent role but hadn’t started working yet. My client’s father had advised them on the bridge, but had not properly considered the exit strategy. My clients were set on the property, and felt it was a good price despite the expense of short term lending, so they progressed down this route.

OUR SOLUTION

However, this was obviously not a viable long term plan. My clients now needed to refinance to a less expensive rate; having scoured the internet for advice, they felt Enness would be able to find them a solution. I emphasised that although my client was taking up a new role, it was in the same field and he had no probation period so was very likely to continue in the same role.

I initially placed this with a high street lender, however they would not accept my client’s high levels of debt; due to the recent purchase they had a sharp increase in credit debt. I managed to locate another lender who would be willing to work with them, and my clients were able to exit the bridge and refinance successfully. The final product I achieved for my clients was a 1.69% rate fixed for 2 years, over a 35 year term. This was an excellent result; refinancing a bridge loan can be complicated, but we are Enness are happy to advise you on this issue.



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