B2B Mortgage can organise speedy finance for auction purchases, refurbishments or property developments. In most cases no proof of income is required, simply proof of deposit funds.
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What is a bridging Loan?
Bridging Loans are no different to long term mortgages in that they are secured by a first charge or a second charge on your property. Because they are secured, the same steps of valuation and preparation of a legal charge deed have to be taken, and so the administration expenses involved are comparable with a normal mortgage. Bridging loans are normally for 6 -12 months duration.
What is the difference between a Bridging Loan and a Commercial Mortgage?
The difference here is that bridging is intended to be quicker than regular mortgage finance, so bridging lenders typically employ a small panel of valuers who will respond more quickly than is normal and their valuation may be on a different basis than for a mortgage lender, since a bridging lender will be interested in what the property might be worth at auction or on a 90 or 180 day open market sale valuation. The value of your property to a bridging lender may be less than you expect for this reason.
Many bridging lenders have their own in-house solicitors to prepare deeds quickly and to advise on the legalities of the property involved. Bridging finance will normally take around 2 weeks to arrange, but in certain circumstances it has been done in as little as 2 days. It is especially useful for auction purchasers.
What are the rates?
Rates for bridging range between 1% - 1.5% per month, and interest can be paid monthly or added to the loan, with no monthly payments made for the duration of the loan. The maximum Loan to Valuation will vary between 50% - 70% depending on the property and risk involved, but the valuation referred to could be a 90 day valuation.
Arrangement fees will vary depending on the deal proposed but are typically between 1% and 2% plus valuation fees and legal fees.