Bridging Loans for a number of purposes

Bridging loans are a specialist type of loan, which are only appropriate in particular circumstances. Bridging loans are only provided by a limited number of specialist lenders and have specific criteria applied.

However, as bridging loans are provided by specialist lenders, they can generally be tailored to suits specific circumstances.

When should I consider a bridging loan?

Bridging loans are normally used to cover crossovers between existing or new financial arrangements. A crossover between financial arrangements can take on many forms:

  • Allowing a homeowner to purchase a new property while they are waiting on their current home being sold.
  • Carrying out renovation and upgrades to an existing mortgaged property prior to reselling it or refinancing it.
  • Providing short-term business cash flow while you are waiting for funds to clear.
  • Clearing a tax bill in full and paying back over a set period.
  • Carrying out essential work on a property before a mortgage or refinance can be agreed, or the property can be sold.
  • Completing work on a building project until the next portion of the self-build mortgage or existing finance can be released.
  • To fund a business start-up or purchase whilst allowing time to raise revenue through trading.
  • To settle a divorce while you are waiting on assets being sold, or to buy your ex-partner out of an existing property.
  • Refinancing of an existing bridging loan.

Bridging loans are generally designed to be taken over a shorter period of time (3 to 12 months for example) and are sometimes more expensive than a normal loan, however bridging loans are designed to be flexible and allow access to finance for circumstances where normal lenders would decline.

Choosing between Bridging Loans

Consider what you can afford to repay per month on the amount you need to borrow and check the best rates different lenders are offering on bridging loans to see which lenders fit your budget - and over what period. Bridging loans are cheapest if you can repay them in full once your project's main financing kicks in, this means trying to confirm (as far as possible) your longer term cash flow prior to taking one out so as to minimise the length of time you need to borrow.

Remember, the short term nature of bridging loans means that set up fees - potentially running into £1,000s - can have an impact on the cost of the loan comparable to the actual interest rate. This means that when you are looking at the overall cost of the loan you should consider the cost of the set up fees as these may determine which bridging loans actually are the cheapest for you.

Bridging Loan Advice that you can trust!

We aim to give you the confidence that you are dealing with a firm that you can trust from the initial consultation, right through to completion of your loan. As a fully Financial Conduct Authority (FCA) approved and accredited firm, you know that the loan advice you receive from Lothian Mortgage Services is impartial and in your best interests.

We are directly responsible to the FCA and do not work for a network of companies with a vested interest in selling you a particular loan. We are independent of finance houses and banks, and happy to provide home consultations throughout Edinburgh, Bathgate, Livingston, Glasgow and Central Scotland.

Call Lothian Mortgage Services today on 0131 212 5006 or CONTACT US using the enquiry form.