FAQ

In most cases you can borrow up to 75% of the value of a property with a Regulated Bridging Loan secured on a single property. If multiple properties can be secured on (for example one home you are selling and one you are buying) then it can be up to 100%.

The term of a Regulated Bridging Loan is set at a maximum 12 months? Most lenders are understanding if you need a little more time to repay the loan (for example if a house sale is taking longer than expected) and they will usually grant an extension. The lender cannot set you up to fail, so they will ask for a robust exit plan to repay the loan within 12 months and no lender will grant a loan without a credible repayment plan.

Every lender is different, but most loan sizes start from £50,000 and can go as high as £10m.

Most lenders will lend for any legal purpose with most common reason being to buy a home, before a current home has sold. Raising money for short-term use such as home improvements, business use, paying a tax bill or repaying an existing mortgage. Lenders rarely offer bridging loans for debt consolidation unless it is a small amount, part of a bigger arrangement and the exit plan is expected to occur very soon.

The most common exit plan is the sale of a house, either the one they are buying or selling. Other plans include pension draw down, investments, savings, sell of a Buy to Let property, Dividends and sometimes sale of an overseas property. If the exit plan is deem speculative or depends on other factors then lenders may not accept them. Remortgage is also a popular repayment plan and most lenders will accept connect repayment plans. For example, sale of a house plus a small mortgage.

No, there are no monthly repayments with a Regulated Bridging loan. Interest is added to the loan, usually monthly. The balance of the loan will increase each month the loan is live. You repay the loan in full plus interest when your exit plan happens. Most lenders allow you to make over payments anytime you wish without any charges or fees. Most lenders will provide an upfront schedule showing exactly how much to repay, at each month during the term of the loan.

No, there is no income or affordability assessment with a Regulated Bridge. Because there are no monthly payments or direct debits, there is no payments to assess against your income. This make it a very good product for those who are asset-rich but income-poor or income reduced, for example in retirement.

This can be a great product for older borrowers, especially those planning to down-size. Lenders will usually lend up to maximum age of 85, but some lenders can have no upper age limit.

No, there are no penalties or fees for repaying the loan. Most lenders allow unlimited repayments in-full or in-parts. There are no ERCs (early repayment charges). Some lenders will apply one months interest for newly created loans. Most lenders have small account closure admin fees of around £50 ~ £100 for closing down the account and this is similar to standard mortgages.

The first thing to say is it should not, because the lenders underwriters will not set you up to fail. They will carry out a plausibility test against your exit plan to ensure it is realistic. However life does happen and house sales can stall or take longer than expected. Lenders will offer flexibility and work with you. The best approach is to maintain contact throughout the term and keep them updated on progress. If it goes past the 12 months, lenders can offer informal extensions, or another 12 months if needed. Some lenders may ask you to make monthly interest payments after 12 months. We can guide you through the best approach if you find yourself in this situation.

The answer to this, is the lender that offers the best deal for your situation. Some aspects of this loan are very similar with all lenders, but some offer very different criteria. At First Select Bridging Loans, we have excellent relationships with all leading lenders in this space and know which lender will support your situation.

Yes you can. Your credit file and repayment history is mostly irrelevant for this type of product, as there is no requirement to make monthly payments, the lenders therefore do not usually review your past payment history. Some lenders will offer a higher interest rate to clients with low credit scores.