Residential Bridge Finance

Residential Bridge Loans are a short term secured borrowing solution, which are often used to ‘bridge’ a gap when you are looking to buy a home until a more permanent or next stage of financing can be arranged or agreed (such as the sale of your current home). This financing is then used to repay the bridge (often known as the exit route or exit strategy). However, they can also be used for other short term borrowing needs and offer a way to quickly release equity from your home.

Bridge Loans secured on your residential home are usually regulated by the Financial Conduct Authority (FCA) in the same way that a standard mortgage and we are regulated and authorised by the FCA to give full advice and make recommendations in relation to regulated Bridge Loans. 

Before securing a bridge loan for you, it is important that we carefully consider your plans and be sure there is a suitable exit route available.

This type of borrowing is generally only arranged over a 3, 6, 9 or 12-month period, so it’s extremely important to look past the initial bridge itself.

Exit strategies for a residential bridge loan could include the sale of the security property, the sale of the home you are moving out of, refinance to a normal mortgage product, sale of another asset or property, refinance of another property or funds from many other sources as overall the bridge provider’s main focus is that the exit is a feasible one.

Bridging loan interest rates are typically monthly rates (as opposed to annually calculated rate on long-term finance such as a standard mortgage or secured loan) and vary depending on various factors. However, it is fair to say that when compared to most mortgage rates a bridge rate is typically much higher. For this reason, a bridge loan is only suitable for a short-term solution and it is important that you have a realistic way of repaying the bridge loan as soon as possible.

Give our friendly advisers a call and we can talk through your circumstances to see if a Bridge Loans is a suitable way forward or advise you on more suitable options that might be available to you.

Buy to Let / Commercial Bridge Finance

A bridge loan can be used for Buy to Let, commercial and semi commercial property and can often give a much more flexibility than a standard or commercial mortgage. 

In most circumstances, these types of Bridge Loans are NOT regulated under the Financial Conduct Authority. However, at Alpas Finance we follow the same due diligence and commitment to provided impartial advice for both regulated and non-regulated Bridge Loans. 

Many investors and BTL clients will use a bridge loan for either speed or due to the lender focus on the repayment of the loan and less on the current condition of a property. Maybe you are a BTL investor that has seen a property that you feel is a great investment but needs works completed before you can secure a standard BTL mortgage as it is not currently lettable or even habitable? Maybe you have the chance to purchase a property but have very restricted timescales and a tradition mortgage just wouldn't arrange funds quickly enough or maybe you want to raise funds on a current property that is up for sale in order to move forward with a new opportunity but your sale will not complete in time. these are all common situations that a Bridge Loan can often help 

Another advantage of a Bridge Loan for many investors using it for a purchase and refurb project is that many lenders will work not expect monthly payment while the loan is in place. They will instead calculate the interest over the term you want the loan for and this is part of the total balance repaid at the end (this is known as retained interest). 

It is always important to carefully consider if a Bridge Loan is the most suitable option and to assess if there are other possible ways to raise funds. However, we will talk through your requirements, assess the options available to you and recommend the right way forward. 

Bridge Finance