Hawke Financial Services LLP is a professional business based in Surrey, specialising in Bridging Loans and other financial services. We are committed to finding the most suitable products to suit your needs from the thousands available.
What are Bridging Loans?
Bridging Loans or Finance is often known as a ‘fast’ Loan, used to fund a project quickly.
Who Are Bridging Loans Aimed At?
Bridging Loans can be used by buyers who are struggling to sell their existing homes quickly enough, or they can also be useful for someone who is part of a collapsed chain; the loan then has the ability save the remaining buyers in the chain.
This type of loan could also help someone looking to buy then sell quickly after renovating a home, or people buying property at auction who need to get their finances in order and can’t arrange a traditional mortgage in time.
When Should You Use Bridging Loans?
You can use your Bridging Loan for most legal purposes. There are many different reasons why a Bridging Loan may be the most appropriate way to gather funds. For example, if a property is uninhabitable in its current state and needs to be refurbished, or if a property’s title is defective. Since mainstream lending criteria have tightened, the demand to take out Bridging Loans has increased.
Other Reasons for taking out a Bridging Loan may be to:
Save a property from repossession.
Pay an unexpected bill, such as a tax bill.
Finance a property that is currently inhabitable.
Finance a property with a defective or complicated title.
Finance a property for which a change of use is required, e.g. switching from a Guest House to an HMO licensed property.
Use property as security for a business loan
First Charge and Second Charge
If you use a Bridging Loan to buy your next home, but you still have a mortgage on your current home, your mortgage will be your First Charge loan used against your current home.
The Bridging Loan could be a Second Charge loan used against your current home. This means it also uses your current home as security. Your mortgage will, however, take priority for repayment should your home be repossessed.
Types of Bridging Loan
A Closed Bridging Loan refers to a facility that will be cleared on a specific date. This would typically apply to those loans which be cleared by the proceeds received from the sale of a property. N.B. Contracts will have been exchanged and a completion date set. Closed bridging loans are a lower risk to lenders because they know exactly how and when they are going to be repaid.
Under circumstances whereby a loan is required until a property has been sold but the sale date is unknown, these facilities are known as Open Bridging Loans. Unless contracts have been exchanged, a lender cannot know when the loan will be repaid. This type of arrangement may have a time limit of 6 to 12 months placed on it and funds can be repaid anytime during this period.
How do I Get a Bridging Loan?
Obtaining a decision to lend from a Bridging Loan provider will depend on several factors. One thing that is different from other finance options is the fact that the bridging finance company will need to understand a clearly-defined path to repayment. The exit route will, of course, vary from project to project, the most usual one being either re-finance on to a longer-term loan, or the sale of the property in question. i.e. selling or refinancing a property, and using the proceeds to repay the loan.
It is possible to either service the interest with monthly payments or for the interest to be ‘rolled up’. This means that the loan includes the interest for the full period up front, and therefore you, as the client will not be required to make monthly payments.
Interest Rates and Fees
This will depend on how robust the application is and which lender is willing to lend. Current rates, as of December 2017 range from 0.37% to 1.5% per month. Please, always ask your broker for a full Illustration outlining all costs before entering the contract.
Are Bridging Loans Regulated?
It is highly likely that your Bridging Loan will be regulated by the Financial Conduct Authority (FCA). Whether your Loan is a first or a second charge will impact the method of regulation.
Bridging Loans for Investment Property
A Bridging Loan may be the ideal solution if you are interested in purchasing a property that needs refurbishment. You should, however, ensure there are no other options before you apply. For example,
If you are looking at purchasing the property, refurbishing, and then keeping it for a longer-term use such as rental, you might find a Commercial Mortgage more cost-effective.
Alternatively, under some circumstances, a specific ‘Light Refurbishment’ BTL Mortgage may be available.
When a Bridging Loan is what you require, the lender would typically look to lend for a period of between 2 weeks and 24 months. This is because the cost of Bridging Finance is typically higher than the of a standard loan. Thus, the longer the loan is outstanding, the higher the amount of funds (by way of interest) will need to be allocated to your project. Although many lenders will not consider offering a remortgage until the property has been owned for at least 6 months, this is not the case with every lender operating in the Buy to Let arena. Therefore, if the property is suitable for mainstream lending after a shorter period, there are still lenders who will consider lending for less than 6 months. You will also be able to raise capital if the value of the property has seen a significant increase.
Why Choose Us?
At Hawke Financial Services Llp, we have direct access to a wide range of Bridging funders, along with the experience to present an application professionally. Many brokers use a ‘Master Broker’ or ‘Packager’ to access bridging finance companies. This is not, however, always the most cost-effective or timely route.
If you are looking for Bridging Loan Advisors, Contact Us here at Hawke Financial Services Llp today.
Call Us on 02086608613 or email us at email@example.com with your enquiry, and we will be happy to discuss your options with you.
Free First Consultation
We offer all our potential customers their initial meeting free of charge and with no obligation
All our team members are fully qualified, professional and courteous. They always keep our customers’ best interests at the centre of our business.
Richard - Perfectly Satisfied With Their Advice And Service
“I was perfectly satisfied with their advice and service. They were fast, helpful and always kept me updated. There was never a moment I didnt think I was getting the best service.”
Mehdi Rizvi - Excellent Professional Service - 14th Sep 2017
“I have been with Hawke Financials (Peter Hunt) since 2014. As a Buy to Let landlord, I found they are extremely professional and provide unbiased/impartial proficient advice. They have access to all the major lenders and offer very competitive mortgage rates with excellent customer service. Strongly Recommended”
Paul Jenkins - Residential Remortgage - 12th Sep 2017
“We required to remortgage for various reasons and were given expert advise on how best to do this along with our many options. I found the information given in a way which was easy to understand and very practical. The process proved to be a little more difficult but without the support from Hawke Finacial I am sure things would have been even more difficult and taken even longer. The delays were with other parties and not because of Hawke.”