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Bridging finance is often seen as an expensive option and more brokers are turning to secured loans as a safer and cheaper option for their clients. Subject to affordability secured loans can replace a typical bridging loan and offer annual rates around 5% with little or no ERC’s. There is also no need to worry about the exit (see the example below).
However more brokers are now recognising that secured loans can meet other shorter term needs and give clients a solution now plus a welcome boost to the broker’s cash flow.
Often client circumstances dictate that the remortgage deal you would like to do is not available now but could be at some time in the future. This could be due to affordability, the latest accounts not being available, or home improvements being required to raise the LTV for a better remortgage rate. Similarly loans for BTL purchase / refurbishment’s are common and of course a secured loan can be ideal when a client is tied in to the current mortgage deal for some time to come.
Brilliant case study
We recently had a deal from an introducer where his client had a run down BTL and another broker had suggested doing a first charge bridge to pay off the BTL mortgage and raise the extra capital needed to refurbish and remortgage. Very expensive and poor advice.
We looked at doing a second charge bridging loan which was much cheaper but ended up arranging a secured loan on the borrower’s main residence at less than half the rate of the bridge. This worked out £1800 per month cheaper than the original bridging option they considered and gave them extra time to remortgage the BTL.
If you have clients who might need money now but the timing of a remortgage is wrong, think of a secured loan as a short term fix with low ERC’s.
Of course if true bridging is what you need, maybe due to affordability, property condition, speed etc. we can do those too.
Below are some key selling points of bridging loans:
- Loans size from £5,000 to £25 million
- Rates from 0.64%
- Regulated and non regulated second charge products available
- Regulated and non regulated first charges available
- Development / refurbishment finance available
- Terms from 1 month to 24 months
- Non UK citizens accepted
- Adverse accepted including bankrupts and mortgage arrears
Call your personal underwriter on 01902 267443 or get further details here.
