- Commercial Finance
An example of where Bridging Loans can be useful to help with the purchase of property
We were recently approached by two clients seeking some guidance around the possibility of requiring a Bridging Loan to help with the purchase of a new property. Both clients had sold their individually-owned houses, with the plan being to purchase a new, larger home together. The funds were required from both of these sales to make the purchase of their new property happen. All was geared up to complete the whole transaction in time to beat the 30th of June Stamp Duty deadline, but then disaster struck...
The sale of one property fell through, which was then followed shortly after by the sale of the other one falling through as well.
This is where the Bridging Loan came into play. It was arranged against both properties, releasing enough money to complete on the purchase of their dream home. The cost of the loan was far cheaper overall than the potential £14,750 Stamp Duty bill that they would have been faced with had the purchase not completed before the 30th of June deadline.
Not only did the clients save money, but when they put their two existing properties back on the market, they each sold for around £10,000 more than the offers they'd each previously accepted. So overall, they were quids in!
Bridging loans can be a great product when used in the right situations, like to assist where there has been a chain break or the sale of a property has fallen through. They are also ideal for when purchasing through an auction, or where the property is currently un-mortgageable. In such a competitive market, the costs are not as high as you might think.
Our Commercial Finance is not tied to any specific lender or group of lenders, and can search the market for the right Bridging solution for you. If you have any questions relating to Bridging Loan regarding such things as the costs, or how the process works, please don't get in touch as we would be happy to talk you through everything.