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Bridging Loans: What is a Bridging Loan and How Does it Work?

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Bridging Loans Explained: What Are They?

How much can I borrow? | Repayment

A bridging loan is typically short term (ranging from 12-18 months) and essentially ‘bridges the funding gap’ between the purchase of one property, and the sale of another.

The repayment process is simple with a bridging loan.

You repay the loan when one of the properties is sold or refinanced.

Bridging finance at Hunter Finance is quick, easy and straightforward, and we lend from £100k to £1million.

Get in touch with Hunter Finance to discover your property development finance options

Call 01825 749721 to discuss your eligibility for a loan today.

What are bridging loans used for?

How can bridging loans help property developers?

If you wanting to buy a property to develop or renovate before selling again in a short period of time, then a bridging loan is a suitable finance option.

This kind of short-term loan allows you to access the money you need quickly and easily.

Our bridging loans can help developers to:

Get in touch with Hunter Finance to discover your property development finance options

Regulated bridging loans allow you to borrow the money in stages to fund your property development project.

How much can I borrow?

How much you can borrow relies on your individual situation and the financial lender.

On residential property, established property developers can borrow up to 100% of their property development charges as a bridging loan.

For commercial property and land, it is possible to borrow up to 70% loan to value (LTV), with 75% LTV possible for premises and properties that are semi-commercial.

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What can I borrow against?

the-avenue-eastbourne-development-finance-7Put simply, the more equity you have in your property portfolio, the more you are able to borrow.

However, you do not need to already own a property to apply for a bridging loan.

How much are the repayments for bridging loans?

Again, this will depend on your individual finance case; however, the amount you repay is dependent on the following factors:

  1. The amount loaned
  2. The length of the loan
  3. The equity in your property portfolio (if applicable)
  4. The value and mortgage of the property in question
  5. Interest rates

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What is a Re-Bridging loan?

Not every property project runs smoothly or is completed by the originally planned date.

A re-bridging loan is used when you need to refinance an existing loan.

Usually, re-bridging loans are used to seek a better interest rate, or if an existing bridging loan is coming to an end or has been unsuccessful.

Refinancing bridging loans are assessed in much more depth than standard bridging loans as your broker will want to ensure that in re-bridging, you are solving the root cause of the financial issue.

To make sure that your bridging loan will not fail again, it is important to form a detailed exit strategy.

Your credit rating and history and the requested LTV will also be taken into consideration.

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How can we help?

As independent lenders, we understand the importance of understanding how it all works in order for you to successfully complete your development project.

We want to make the process of obtaining finance for your development, as simple and stress-free as possible.

We offer specialist funding options:

Call us today to discuss your property financing options: 01825 749 721.

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Apply for property finance today

If we can help we will say so, if we can’t we will be able to point you in the right direction or suggest alternative financial vehicles.

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