When I mention bridging finance as a means of funding a property purchase most investors do that sharp intake of breath and, inevitably, say “Isn’t that expensive?”
Most people see bridging as an expensive option as the interest rates are much higher than a mortgage - but, for the smart investor, bridging is only expensive if you don’t use it intelligently.
You probably don’t need bridging. However, if you can’t tick all of these boxes bridging offers a route to increasing the health of your bank account.
This is a bit like asking ‘how much does a car cost?’. The answer depends on the engine size, the model, options included, the fuel efficiency and even the badge on the bonnet.
The cost of bridging will depend on:
However, to give you a ballpark view of bridging costs, here’s the basics:
If you’ve never used bridging finance before, the research is going to be a massive mountain to climb. However, an experienced bridging broker will have a wealth of invaluable knowledge that will save you time, money and headaches.
Remember that all mortgage brokers are not experienced in bridging loans (regardless of what they may say). Some will ‘give it a go’, others will outsource it to someone else. Don’t risk putting your funding in inexperienced hands - then bridging can end up being VERY expensive!
You need an expert who knows which lenders will lend on property value rather than purchase price, which lenders aren’t focused on your slightly spotty credit record, which lenders don’t run for the hills if you’re not meeting some mystical annual income from your full-time work, which lenders will fund your refurb costs as well as the purchase.
If you need some guidance - get in touch.
If you want more information, watch this video on my YouTube Channel