Watch our short video which is aimed at anybody who is a broker, landlord, property investor, developer, or a consumer who needs the fastest bridging completion times on unregulated bridging finance such as buy to let or business loans.
Fastest bridging or cheapest bridging – whats most important?
This little known product does bridging differently and that’s how it usually delivers the fastest bridging completions in the market. As we explain it you’ll see that it’s very different to what you might get from mainstream bridging lenders. So consider your priorities to see if this product is right for you.
Let’s just talk briefly about what’s important for most people in bridging. The main considerations are normally interest rate, set up costs and speed / certainty.
Bridging interest rates
The interest rate is less important than many people think because, at the end of the day, bridging is a short-term facility. Unlike a mortgage you are not going to have this facility for long. Therefore, if the rates are in the right ball park, maybe focus on other factors which are important to you.
Bridging set up costs
These are important considerations because it is a short-term product. So if you’re paying money on valuations, application fees and high solicitor costs, these could outweigh the benefit of a lower rate very easily.
Speed = certainty = getting it done
There’s no point getting hung up on rates and fees if the bridging product you select doesn’t come through in time. The cheapest offer is of no use if it arrived to late to close the deal.
Fastest bridging and also cheapest bridging?
We are not saying this will be the cheapest bridging every time but, due to the way it is processed there are ways to save costs. It could therefore be a good solution for you.
Potentially, you don’t need a valuation so that saves money.
The solicitor’s costs may be a lot lower or even nil. that saves money again.
Speed and certainty – we think its the fastest bridging out there so a big tick here.
What about second charge bridging? – this can add time and costs to get consent from the first mortgagee to register a second charge. This lender can avoid both.
How is it different to the normal bridging process?
Standard bridging process
Let’s just look at the standard bridging process although they all differ slightly by lender. Certainly some lenders are faster than others but the basics are generally the same.
Day 1 – we get an inquiry. Even with a direct relationship with the lender there are some which can take a day or so to provide indicative terms. However in most straight forward cases we will have terms within 24 hours or less – so this part of the process can be fairly quick.
At this point most lenders will want some supporting information and this is sensible – you don’t want to spend money on a valuation to then fall down on a criteria technicality – That’s time and money wasted.
Assuming your broker and the lender are happy that they have enough information to be fairly sure that the case will meet underwriting requirements you can push on to get the valuation done. Of course you can instruct the valuation earlier but that risks you cash if the lender decides it doesn’t like the whole case.
At valuation there are many external factors – how fast it can be instructed, how fast the valuer and owner can arrange the appointment and how quickly the report can be typed up and sent to the lender. Then how quickly the lenders underwriter can review the valuation and sign it off as acceptable. Typically allow 7 days for the valuation to be carried and at least 48 hour for the valuation to be dispatched and another 48 hours to be signed off by the lender. It can be done in a week or less but the norm is usually more
Formal terms issued to you
Solicitors – here’s where it get interesting. You may be tempted to use your local conveyancing solicitor – please don’t. It seems Solicitor love nothing more than arguing about who’s right or wrong on the lenders requirement. It’s simple supply what the lender needs and stop arguing or delaying. This costs you time and money and some solicitors simply don’t work at the pace required for bridging – we have seen weeks lost due to this. Use a firm of solicitors which are very experienced in bridging and commercial transactions. Some lenders offer two firms in house (one for you and one for them). This is called dual representation and can work well for you as both firms are used to working together. They don’t tend to faff about and often cost less than your local alternative. Even then expect to lose a few days with solicitors
One to two weeks is technically possible from enquiry to completion but unlikely
Two to four weeks can be achieved if all the planets are aligned but is not the norm.
Four to eight weeks is common due to so much third party reliance and the case being passed from one party to another – each adding a small delay.
Fastest bridging – we call it expedite bridging
This product is available for first and second charge loans which are non-regulated loans / mortgages. This means they can only be secured on the borrowers main residence if the loan is purely for business purposes.
Consequently these products are aimed at landlords, property investors and business owners where speed of completion is important. It can be secured against a property you already own or against a property you are buying at auction and need to complete on quickly.
Expedite bridging process
Let’s consider a similar scenario to above where a bridging loan is being taken out secured on a buy to let property to raise capital for another purchase. Speed is needed to close the deal.
Day 1 we get an enquiry – we aim to have you talking direct to lender same day. This removes delays and any misinterpretations. You get to ask the questions you want and so does the lender.
Terms issued to you same day
Lender arranges to meet you at the property – normally within 24 hours.
At the meeting
Lender assess the property valuation when on site – if there is lots of equity they usually elect not to get a full valuation
The agreement is fully explained and you can sign there and then.
The agreement is taken back to the office and the legal work is done in house with no solicitor involvement – same day
What about second charge loans? – in most cases they will rely on the credit search for the balance and don’t need consent from the first mortgagee – saving days of delays and further costs.
Cutting out third parties, solicitors and dealing with you direct saves days and normally weeks.
A remortgage in two to three days is technically possible and can be done.
Remortgage completion is typically done in 1 week
If a purchase typically everything is with your solicitor for completion in 1 week.
What loan to value?
Again this product is different. – let us explain.
In most cases, borrowers taking bridging prefer to add the interest to the loan. This allows them to have no repayments to make whilst they have the loan in place. So from an loan at 70% loan to value, the lender will deduct all interest payments and fees. Therefore the amount you receive in hand is significantly lower – closer to 60% LTV
Our expedite bridging lender will lend a net loan of 60% and add the interest on. This allows you to borrow an amount approaching 70%.
Is this loan right for you?
This isn’t a product for every occasion, but if you are in a hurry it could be what’s needed to get the deal done quickly. If you don’t get the loan completed quickly you might miss out on that deal altogether. Remember this particular product is for residential investment property – not commercial property. we have other products specifically designed for commercial property scenarios.
So if you’re interested in speed and certainty on a great bridging product, we love it. It’s really fast and the deals get done quickly. Of course, there are lots of other alternatives. There are many more mainstream lenders that we can go to and often they may have cheaper rates and yes they’ll do different things.
This is a niche product but if you think it might suit you we can compare rates and costs for you. We can also give you realistic expectations on how long the various options will take to complete. That will depend on your circumstances and requirements.
Keep this product on your radar for when time is critical and talk to a Promise Money adviser for more details
Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.
More than 50% of borrowers receive offers better than our representative examples
The %APR rate you will be offered is dependent on your personal circumstances.
Mortgages and Remortgages
Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66
Secured / Second Charge Loans
Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20
Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG
Authorised and regulated by the Financial Conduct Authority – Number 681423The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages
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