A client of mine was selling his current property in Broxbourne, Hertfordshire in order to upsize to a five-bedroom house in the same area. The property was on the market for £1,175,000.
The client had recently sold his company and was due to get paid £1 million towards the end of the year as a pay-out. However, he currently only had £400,000 to put down as a deposit combined with his cash savings and needed to raise £550,000. As he only needed a short-term solution but needed to raise funds quickly he had decided that he wanted a regulated bridging loan rather than a mortgage.
A regulated bridging loan means that the lender only examines income and bank statements rather than being guided by income multiples unless the exit route is refinance. As my client was planning on living in this house as his main residence the loan had to be regulated. Not many bridging lenders will do regulated loans as this tends to slow down the turnover of business from their end so our options were fairly limited but I had a few banks in mind.
We were able to present one particular lender with proof that my client was due to be paid the large sum of money aforementioned at the end of the year. This evidence was enough to secure a regulated bridging loan on a 9 month term at an interest rate of 1.3% per month with no early repayment charges.
My arrangement fee was set at 2% and the entire application was completed in a timely manner – taking 3 weeks from start to finish. My client was extremely impressed that I managed to secure the entire regulated bridging loan on the basis that he was selling his company. This was a fairly rare proposition but I think that it demonstrates that we are capable of constructing a loan in exactly the way the client thinks is best.