I want to buy a house
Answered on 10 November 2017 by Nick Morrey
I am looking to buy a house and then do up to sell on, I will be doing the work myself and will take about 3 months to complete. However I have asked a few mortgage companies and they would not give me a mortgage for only 3 months. So is the only other option a bridging loan as I understood the interest rates on a bridging loan were extremely high and the loan is secure? Could you give me some more information on bridging loans and how they work?
You are right that it would need to be a bridging loan / development finance, as the loan is too short term for mainstream lenders. The rates for bridging are higher but they reflect the type of lending being carried out, which is short term finance where the exit strategy is the sale of the property.
In most cases the loan interest will be 'rolled up' and added to the overall borrowing, along with the arrangement fee. There is a lot of competition in the bridging loan market these days and so while the rates are higher than standard residential and buy-to-let rates, we can still make sure that you get the best deal available.
If you'd like to discuss the options open to you in more detail, then please contact one of our consultants on 03304 332 927 and they'll be able to give you a more detailed idea of the bridging / development deals that may be available to you.
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