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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 7th September 2020*

If you’re in the market for bridging finance solutions you’ll undoubtedly want to know which lenders are most proactive in offering these products and how to find them – with as little delay as possible!

To answer these questions and more, we’ve put together this comprehensive guide where we will cover:

As time is usually of the essence with bridging loans, it’s important you speak with an advisor who has experience with this form of finance.

Once you’ve read through the details below, don’t hesitate to make an enquiry and we can arrange for someone to contact you directly.

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Bridging loan lenders: what you need to know

Bridging loans, by their very nature, are usually needed in a hurry. It’s vital, therefore, that you can find a lender who you can trust to move through all aspects of the application process with the appropriate mix of haste and efficiency.

As a flip side to this requirement, bridging loan lenders will expect customers to have an exit strategy – usually to refinance or sell – already in place. You should know beforehand how you’re going to repay the loan before you approach a lender.

Other important points to consider when looking for bridging loan lenders are:

  • The terms offered for bridging finance can vary quite extensively between lenders which can make finding the best deal for your own circumstances trickier to identify.
  • Lenders interest rates and associated fees are usually higher (on a like for like basis) for bridging loans than those offered for traditional mortgages
  • Typical loan terms offered by bridging lenders are from 1 month to 2 years, however, a few will go as far as 3 years
  • Bridging loan lenders will only offer 100% of the whole amount required for the deal if you put up extra security. Most will offer a maximum loan to value (LTV) of 70% as standard, some will offer 75% and a few 80%.
  • For development projects, most lenders will place an emphasis on the applicant’s previous experience. The more experienced you are, the better deal you can secure

If all of the above is making the idea of bridging finance more difficult than you imagined – don’t panic! This is where we can help.

The advisors we work with have an in-depth knowledge of this form of lending and will be able to review their comprehensive bridging loan directory to find a lender with the best terms for your specific requirements. Make an enquiry and we can arrange for a specialist to get in touch.

How to find the best bridging loan lenders

The most effective way to find the best bridging loan providers is to use the services of an independent broker. They will already have a deep understanding of what products terms are available for this type of finance including deals which aren’t available directly to the general public.

Remember, time is of the essence with bridging finance. If you need to act swiftly to arrange your loan then enlisting the services of one of the experts we work with will likely prove to be a shrewd move.

Also, applying for countless loans in an attempt to raise finance quickly could have an adverse affect on your credit score. It’s best to work with a specialist who will know where to look for the best deals and from which lenders.

If you’d like to get in touch with a broker who specialises in arranging bridging loans, make an enquiry and we’ll be in touch to discuss your plans and requirements.

Which are the best bridging loan lenders?

This really depends on your own personal requirements, in addition to each lender’s attitude towards bridging loans. In this section, we’ve provided a brief summary of some of the more well known lenders and their stance on bridging loans at the time of writing.

While this should give you an idea of the terms you may be able to secure for this form of lending, it is only intended as a snapshot of what is available. We would always advise that you speak to an expert for a more complete picture of the bridging loans market.

Lloyds Bank

Lloyds bank offer bridging loans for customers who are looking to purchase their new home before selling their existing one. They offer bridging loans on both an open and closed basis with the expectation that the sale proceeds of your existing home will repay the loan.

For all development projects, Lloyds lending preference for their customers is to use self-build mortgages. If you’d prefer to use a bridging loan in these circumstances you should use a broker who can look for alternative lenders.

Masthaven

On a first charge loan, Masthaven can offer a maximum loan to value (LTV) of 70% and for a second charge 65%. The loan term is from 1 month to 18 months, therefore, if you would prefer a longer term you should consider enlisting the help of a broker who will be able to find lenders who can satisfy this requirement.

HSBC

At the time of writing, bridging loans are only available to HSBC customers who are resident in Hong Kong. Bridging loans are not part of the range of lending products offered by HSBC to customers in the UK.

If you’re an existing HSBC banking customer and would like to understand which alternative lenders would offer bridging finance in the UK, get in touch and we will arrange for someone to speak with you directly to pass on this information.

Precise Mortgages

Precise Mortgages offer bridging finance mortgages with a minimum advance of £50,000 or £25,001 for limited companies. They will only consider income that has been derived from employment within the UK.

Oblix Capital

Oblix Capital offers a maximum LTV on a first charge bridging loan of 75% and for a second charge 65%. The loan term offered by Oblix is only up to a maximum of one year. If a longer-term is preferred, you should use a broker to identify lenders who can offer this.

Shawbrook

Shawbrook Bank can offer a maximum LTV of 75% with loan terms of up to 2 years for a minimum advance of £50,000.

Greenfield Capital

Greenfield Capital offer a maximum LTV of 70% with loan terms up to 1 year for a minimum advance of £25,000. Their arrangement fee is quite high at 2% (at the time of writing), therefore, it may be best to use a broker who can find lenders with a more competitive charging and fee structure.

Do all mainstream banks offer bridging loans?

No, not all. A number of mainstream banks, such as RBS and Barclays, offer a bridging loan facility only to their high net worth clients if required. Most other mainstream banks and building societies do not engage proactively in seeking new customers for bridging loans, such as:

  • Natwest
  • Santander
  • Halifax
  • Nationwide
  • First Direct

How to apply with a bridging loan lender

Whilst it may be tempting to approach lenders who offer bridging loans directly, this isn’t usually recommended as it will limit you to only one provider’s products which may not necessarily be best suited for your requirements.

Using the services of a whole of market broker is the best way to find the most competitive product, with the best terms available. They will also have close relationships with many of the lenders and can introduce you to the one that best suits your needs.

In additional to the bridging loan providers listed above, the advisors we work with have also successfully arranged bridging loans with the following lenders:

  • Aldermore
  • Bank of Scotland
  • Bank of Ireland
  • Ulster Bank
  • TSB
  • Wellesley Bridging Finance
  • Central Bridging
  • Together
  • KIS Finance
  • Bridging Finance 4 U
  • Bridging Loans Ltd
  • Capital Bridging Finance Solutions Ltd
  • Barclays
  • RBS

Speak to a bridging loan expert today

Bridging loans need to be arranged quickly, however, they can also be quite complex so it’s important that you’re fully prepared beforehand. Lots of people in your situation seek professional advice before making a final decision on which lender is best placed to assist.

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.

Updated: 7th September 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.