PROPERTY BRIDGING LOANS

What is Property Bridging Loan?

Property bridging loans, commonly referred to as bridging finance, are short-term loans designed to bridge the gap between the purchase of a new property and the sale of an existing one. These loans are particularly useful for property buyers who need quick access to funds to secure a new property before their existing one is sold.

Bridging finance for property development can be secured from £100k to £1M. If the question is how much you can borrow, it will depend on the property's value. Indeed, Kinetic Finance will help you evaluate the property. Property value refers to the amount of equity you have in the property and your loan-to-value (LTV) ratio. Your ability to repay the loan is also one of the deciding factors when it comes to bridging finance for property.
 

What are the common uses of Property Bridging Loans?

1. Purchasing a new property before selling an existing one.

2. Funding property renovations or developments.

3. Raising capital quickly for investment opportunities.

4. Covering unexpected costs related to property transactions.
 

Eligibility to Apply for Property Bridge Loans

• Property bridging loans need collateral as they are a type of secured loan. Kinetic Finance typically asks for the asset to be used as a security when you apply for a bridging loan. If you are unable to repay the property bridging loan, we have the right to repossess the asset.
• Your exit strategy is a crucial part of the property bridging loan eligibility criteria because it shows lenders how you plan to pay off the loan. There are several types of property bridging loan exit strategies, which include selling the property, refinancing by switching to a traditional mortgage or using money left as an inheritance.
• Kinetic Finance requires a minimum loan size of £100,000 for a bridging loan.
• Kinetic Finance will usually consider a wide range of property types for a residential bridging loan. These include land, houses, flats, garages, parking spaces, and holiday homes. Commercial bridging loans may also be used to finance health clubs, hotels, and restaurants.
• A good credit history could help improve your chances of being accepted for a property development loan and of getting the lowest rates.
• Applicants must be 18 years old to apply for a property bridging loan. Kinetic Finance has no limit and offers bridging loans for buyers aged 70 and above.
• The proof of income isn’t generally an important factor when assessing a bridging loan application. This is because you will need to show a good exit strategy to prove how you will pay off the loan.
• Kinetic Finance will require a reason for why you need a property bridging loan. For example, you might apply for a bridging loan if you are buying a property before the current one is sold, bidding for a property at an auction, and renovation.
   

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Helping you Bridge the Gap

Bridging loans bridge the gap while the organisation or the individual is trying to secure a permanent financing solution. These loans offer immediate cash flow to meet current obligations, while borrowers wait to get access to a larger fund.
 

What Interest Rate will I Pay on a Property Bridging Loan?

Property bridging loan interest rates are typically between 1.5% and 2% per month. However, the exact interest rate you get will depend on the type of property you are buying, your exit strategy, how quickly you need the capital, your loan to value (LTV),and the bridging loan provider you opt for.
 

What Types of Property can a Bridging Loan be Secured on?

Property bridging loans are typically secured against the asset being purchased or renovated. In the buy-to-let market, this means a property that you are purchasing, renovating, or securing at auction, will be used as the collateral. Bridge loans are not directly linked to the borrower’s income. To repay the loan, the borrower would need to sell the property, sell another property or asset, or raise long-term finance to pay it back. So, when taking out a bridge loan, do ask for an exit plan.

HOW TO APPLY FOR A PROPERTY BRIDGING LOAN WITH KINETIC FINANCE?

• If you are looking forward to taking a property bridging loan with Kinetic Finance then visit our contact us page and apply now and to get information about property bridging loan process, interest rates, terms, and eligibility. Kinetic Finance do have specific requirements related to income, credit history, and the property being used as collateral.
• You need to prepare certain common documents required for a property bridging loan application. This may include proof of income, credit history, sales agreement, property valuation, and details about the property being sold and the one being purchased.
• After completing the application process, ensure that all required information is accurate and updated. Kinetic Finance may conduct a valuation of both the property being sold and the one being purchased. This is to determine the loan amount they can offer based on the actual value of the properties.
• Once you have submitted your application and all required documents, Kinetic Finance will review your application. This may involve a credit check and a detailed assessment of your financial situation.
• If your application is approved, Kinetic Finance will provide you with a loan offer. The terms and conditions of the bridging loan, including the interest rate, loan amount, and repayment schedule will be given.
   

After the legal process is completed, Kinetic Finance will disburse the loan amount. This is done by paying off the existing mortgage on the property being sold and providing the remaining funds for the purchase of the new property. Finally, you need to repay the loan according to the agreed-upon timeframe. Bridging loans are usually short-term loans, and repayment is often expected when the sale of the old property is finalised.
 

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Frequently asked questions