Residential bridging loans can be a useful tool if you’re purchasing a property and need to move quickly. Yet the availability of bridging loans for house purchases often isn’t something that potential buyers know about – meaning many fail to take advantage.
If you’d like to know more about using bridging loans for mortgage purposes, an Articus Finance broker can help.
What is a residential bridging loan?
A residential bridging loan is a type of regulated short-term property finance. Bridging loans can be arranged much faster than standard residential mortgages, and you could secure your funds within a matter of days, rather than weeks or months. The term of a residential bridging loan will usually be between one month to a year, although this can vary.
The downside of this is that interest rates are higher than conventional mortgage finance. So while they’re not long-term solutions, they can be very useful.
What can residential bridging loans be used for?
Residential bridging loans can be useful in a number of circumstances. For example, they can prevent a breakdown in a property chain. If your current home hasn’t been sold – perhaps because your buyer has pulled out – but you would still like to proceed with an onward purchase, a residential bridging loan can bridge this gap.
Residential bridging finance might also be useful if you’re struggling to arrange traditional mortgage finance against a property. This could include purchasing a house at auction that you intend to live in.
Why should you use a broker to arrange residential bridging loans?
Used in the right way, residential bridging loans can work to your advantage. However, it must be acknowledged that bridging finance is both more complicated to arrange and to understand, given the interest payments on a bridging loan can work in a number of different ways.
At the same time, the main appeal of bridging finance is that it can be arranged at speed. But making this happen isn’t straightforward: the fastest deals are those arranged by a broker, working around the clock to see it through.
This is especially true if you’re seeking a high value bridging loan, or if you have any complexities in your background – such as being a foreign national. Using a broker with many years’ experience can ensure the process runs smoothly, and we can also help to negotiate the best rate and terms for your situation.
Is residential bridging finance regulated?
The UK’s Financial Conduct Authority (FCA) regulates residential bridging finance. While some types of bridging finance are unregulated, if the property is going to be occupied by the owner or immediate family, this must be a regulated loan – meaning you must use a broker who is also regulated.
Our specialist mortgage brokers are highly experienced in negotiating the best mortgages and mortgage rates, no matter how complex your situation.
With over 20 years’ combined experience sourcing the best mortgage deals for global clients, our brokers have the skills, knowledge, and lender relationships to turn your property aspirations into a reality. To find out how we do it, explore our case studies.View our case studies