Residential Bridging Loans

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Residential Bridging Loans can be the perfect solution for people who want to purchase a property as soon as possible but have not yet sold their current property or are stuck in a chain. As well as purchases, residential bridging loans can be used for refurbishments or to refinance a residential property.

How to choose a bridging loan

Bridging loans are developing all the time with more options coming into the market constantly. With so much choice it makes sense to seek expert advice from an experienced specialist who can search the market to find you the best match. At Mesa financial we are not restricted to a panel of lenders so that we can do just that. It is our priority to add value for our clients.

Any bridging loan remains a temporary solution to facilitate your residential property purchase, renovation or refinancing.

Advantages of a residential bridging loan

  • Receive the funds quickly
  • You can borrow on properties that may not necessarily be suitable for a normal mortgage
  • Large loans available – no maximum limit
  • Flexible borrowing
  • Fixed or a variable rate
  • Available as a first, second and even third charge loans
  • No early repayment charges

How much can you borrow?

The maximum most lenders will go to on a residential bridging loan will be 75% loan to value.

How is interest charged?

Interest rates on bridging loans tend to be higher than your normal mortgage lending and are designed for a short period of time.

As they are short term, bridging loans usually charge monthly interest rates rather than an annual percentage rate (APR). This means that just a small difference in the interest rate can have a big impact on the overall cost of your bridge loan.

But the interest is not always charged monthly. There are three main ways it can be charged. These are:

Monthly – You pay the interest monthly and it’s not added to your bridging finance. This is also known as servicing your loan.

Deferred or rolled up – You pay all the interest at the end of your bridge loan. There are no monthly interest payments.

Retained – You borrow the interest for an agreed period, and pay it all back at the end of the bridge loan.

Some lenders let you combine these options. For example, you could choose retained interest for the first six months, and then switch to monthly interest.

How you are charged on your bridging loan can make a huge difference in the total amount you repay to the lender. It is key to take advice from a qualified professional to keep you overall costs to a minimum.