Choosing a lender that is right for you
There are an increasing number of short term lenders entering the market and choosing one can be a minefield particularly as some types of bridging finance require a regulated lender.
For landlords and property investors however, the type of bridging loan required is usually of the non-regulated variety so it is not essential to use an FCA registered lender. Many reputable bridging lenders are members of the Association of Short Term Lenders, a self-regulating body which operates a strict code of conduct to ensure that borrowers are treated fairly.
The most commonly known reason to get a bridging loan is to fund the purchase of another property while you are still selling your existing one. However, bridging loans can be used in many other ways to support the growth and financial needs of individuals and businesses.
To refurbish, renovate or redevelop a property
Sometimes a property may need significant renovations or complete redevelopment in order to make it generate a return at sale or as a rental. Sometimes, the condition of these properties will not meet the requirements of a buy-to-let mortgage, or funds are needed quickly to start the work. In this case, a bridging loan is used to provide the capital to complete the renovations and then exit or pay off the loan by moving to a buy-to-let mortgage or selling the property.
For purchasing a new property
This includes buying a property at auction, where a traditional mortgage lender could not issue funds in time to cover the purchase, to buy a property that wouldn’t be covered by a traditional mortgage from a high street bank or to handle issues of poor credit. It’s also possible for a combination of these factors to be the reason to use a bridging loan. If you are interested in our services, please call Richmond Asset Finance today.
Interested in applying for a bridging loan? Contact us today!