What is a large bridging loan?
Bridging loans are temporary borrowing solutions that let you borrow large amounts of money quickly. They are secured against a property you own, which means if you default on your loan, your property could be repossessed.
These loans can be used for several purposes and allow you to take advantage of time-sensitive opportunities, such as purchasing a property at auction. Like all bridging loans, you will need to provide an ‘exit strategy’ to your lender. This is a plan of how you intend to pay the money back.
Whilst this can be a great option, the interest rates can be much higher than some other funding solutions. Therefore, it can be a more expensive route to take.
Our experts have access to a range of options, meaning we may be able to help you unlock a big sum of money to fund all your plans.
What could you use a large bridging loan for?
There are many reasons you might need a large sum of money. Some of the most common examples include:
High-value property purchase:
If you are buying a property with a high market value, a large bridging loan might help. It can give you the required funds to complete the purchase. This may be particularly useful if you are waiting for another property to sell to get the funding needed.
Prime real estate investment:
Investing in properties in desirable locations often needs a lot of funding. For example, if you are looking to buy a house in London, you may need a much larger amount of money to help you achieve this. A large bridging loan may be able to help you seize investment opportunities in this type of market.
Extensive property refurbishment:
If you plan to completely renovate a property, you may need a substantial level of funding to do this. In this case, you may need a big bridging loan to help you.
Commercial property investment:
If you’ve found a large commercial property you would like to buy, you may need a big amount of funding behind you to achieve it. If a commercial mortgage isn’t a viable option for you, a large bridging loan could be used instead.
Keep in mind that your situation and loan requirements are unique. Therefore, consulting with a financial advisor, trusted lender or broker is crucial. They can help evaluate your eligibility, explain the loan terms, and guide you in making the best decision based on your specific needs.
How much does a large bridging loan cost?
When thinking about the cost, you should note that the terms and fees can vary.
Interest rates: Large bridging loans usually have higher interest rates than traditional mortgages. This is due to their short-term nature and quick access to large funds. The interest rates can vary based on factors such as loan length, loan-to-value ratio, and your creditworthiness.
Arrangement fees: Arrangement fees are usually charged by the lender to set up the loan. These fees can vary but are often a percentage of the loan amount.
Legal fees: When you involve solicitors, there will be legal fees to cover tasks like property searches, title checks, and drafting legal documents. The cost of these fees can vary based on the complexity of the deal and the solicitor’s rates.
Exit fees or early repayment charges: Some loans may have fees or charges if you repay before the agreed term. It's important to consider these charges when calculating the overall cost of the loan.
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How much could I borrow with a large bridging loan?
The amount you can borrow depends on some factors, including the value of the property used as security, your creditworthiness, and the lender’s criteria.
It's key to note that each lender may have different criteria and policies around loan sizes. They may also consider other factors; such as your income and ability to repay the loan.
Our experts have solutions ranging from £50,000 to £50 million, so we may be able to find you a solution.
How to apply?`
Simply call our experts to enquire. Or, use our online form above and we will give you a call.
