Bridging finance recommendations

[gstraw 2]

Hey all! 

I'm looking to purchase our first property with bridging loan (note we have 3 BTL already but they have all been through BTL mortgages) 

Anyways I'm looking for recommendations for who you have used before and rough costs? I've seen from 0.5 to 1% per month but that's a massive difference. 

 

The property value is 100k and I'll buy it for 100k hopefully, spend 15k on it so I need 120k in total with fees and stamp duty. 

If ideally like to borrow 60 to 70k over 6 months. 

 

Many thanks! 

[Nathan Cole 20]

Good morning @gstraw

With regards to short-term finance/bridging, you are correct, the rates tend to vary from 0.43% to upwards of 1% from lender to lender.

In terms of which lender is going to be best for yourself, that would totally depend on what you're looking to achieve (Timescales, Type of Purchase, etc.)

One way you can help to ensure a low rate, is by keeping the loan to value low as low as possible. A great way of achieving this is by utilising a lender who can 'Cross-Charge' therefore allowing you to offer additional properties as security, such as one of your buy to lets, to help reduce the total loan to value. Clearly this is not essential, but it is certainly something worth considering. 

I am helping a client at the moment, who is looking to purchase a property prior to selling his existing home, and we have utilised cross charging to help release 100% of the purchase costs for his new home.

I hope this is helpful and please do let me know if you have any questions. 

Thank you for your time.

Best regards

Nathan Cole

 

 

[alja nosm 9]

I secured one at 0.29% but that was at 30%ltv. I think it was with Together Loans

You'll probably add anywhere between 4-6k onto of interest payments.

[Nathan Cole 20]

5 minutes ago, alja nosm said:

I secured one at 0.29% but that was at 30%ltv. I think it was with Together Loans

You'll probably add anywhere between 4-6k onto of interest payments.

@alja nosm That is a fantastic rate for bridging finance. I believe rates from Together are currently starting at 0.49% now.

[alja nosm 9]

13 hours ago, Nathan Cole said:

@alja nosm That is a fantastic rate for bridging finance. I believe rates from Together are currently starting at 0.49% now.

Yes I thought it was a very good rate, that was for 6 months, with an increase to .6/.7 afterwards if project over ran....Again for small projects it's really the fees etc which is the main cost factor.

0.49 is still very good.