Bridge Doctor Archive

Many bridging finance companies advertise that they offer 100% of purchase price, but in reality on 1 single property it is around 80% of purchase price, or 70% of OMV, whichever is the lower figure. To obtain 100% of purchase price, what most companies do is lend the 80% on the purchase, and then look to other property that the client may have to see if they can get the extra 20% on a 2^nd charge either on their main residential property or other BTL that they may have. Typically they gear up to 65% LTV on 2^nd charges minus whatever the first charge is.

The borrower's income is relevant if (a) they intend to service the interest and / or (b) they intend to refinance the bridging loan and will depend on their income to obtain that refinance.  In that case, the lender will need to consider two factors (1) what exact form does the investment income take - in other words is it reliable or prone to year fluctuations? 

All bridging companies would lend against a purchase of a property that requires renovation and or refurbishment. The only thing that would differ would be the LTV and fees involved. The majority of companies would lend around the 60-65% mark for this type of purchase, but generally speaking the client would have to have the costs of the work covered. If the client had other property (main resi or btl) then they could explore a second charge bridge on that security in order to raise the extra required funds.

Adverse credit remortgages at 75% used to be a walk in the park back in the “good old days” of pre crunch. However, there are quite literally one or two lenders in the market place now who are lending to anyone with any form of adverse at all, and generally they are around the 60% mark. It does of course depend on how bad the adverse is, CCJ’s/Defaults/IVA/missed payments etc, but there is no one out there who will go to 75% right now.

Several bridging lending firms could help to get you wind and water tight on a self build, but it will depend on what the current value is of the land/site is now, and what borrowing (if any) is on there. You may well find a firm that is willing to lend up to 50% of LTV on the land/site as it stands and you could be able to get your build money that way. Failing that, if you have other property that you own at a lowish LTV, there may be some firms who could look to give you a bridge on a second charge basis.