What is the Application Process for a Bridging Loan?

Bridging loans are a type of short-term loan that can help you cover a financial gap. Until you’re able to secure longer-term financing. If you’re thinking about applying for a bridging loan, it’s important to understand the application process and what lenders are looking for. In this blog post, we’ll outline the basics of the application process and give you some tips on how to make your application stand out. Thanks for reading!

Bridging loans are a flexible and quick way to raise short-term funds. Bridging loans are short term loans that are designed by Bridging loan providers UK to facilitate the immediate financial need of the borrower. 

They can be used for a number of purposes including maintaining a house buying chain, completing the purchase of property at auction, renovating the property, and business cash injections.

How to Get a Bridging Loan Quote

The best way to find a favorable bridging loan quote is by seeking whole-of market advice. This will ensure that you have access and can rely on the best deals for somebody like yourself with your particular circumstances, needs or goals in mind.

Bridging Loan Eligibility Criteria

Bridging loans are an essential tool for those who turned down by traditional lenders. They can provide the much needed funding to get your finances back on track and make it possible once again! Bridging loans can be a lifesaver for those who have been turned down by traditional lenders. The lender will assess your eligibility based on the following factors:

  • Your deposit size
  • Your location
  • Credit rating
  • Your exit strategy                           

Bridging Loan Application Process

The first and foremost step in applying for any kind of loan or security is the application process which involves basic information about the borrower and the borrower’s property being used as collateral.

All bridge loans are for a limited period of time and are interest-only, with the borrower not typically making monthly payments. The entire loan amount is due in the end, and your exit strategy is how you intend to pay it off. Refinancing or a house sale are the most common options, while some lenders would allow you to repay early if you have money before the end.

The bridging loan process of bridging loan providers UK involves the following steps.

Step 1  Initial Enquiry

In the first step bridging loan providers conduct a fact find about the borrower to know about their personal and employment circumstances. In this, they gather basic and general information by simply asking a few questions.

Step 2 Detail of Exit Strategy

The bridging loan providers UK will request details of a borrower exit strategy, assess its viability and want to see evidence supporting it. All terms and conditions about exit strategy are discussed with the borrower to avoid bogus claims.

Step 3 Agreement in Principle/ Underwriting    

In this step bridging loan providers UK asks for an agreement in principle from the borrower which is an underwriting consisting of basic conditions about the loan. Some, however, skip the agreement in process and go straight to full application.     

Step 4 Conditional Offer                            

After the underwriting process has been completed, the borrower will be presented with a conditional offer. Unlike with a mortgage, this is not binding and is dependent on the valuation and certain conditions from the solicitors.      

Step 5 Application Passed to Solicitors for Completion

Then, once the application has been completed by our lawyers in their entirety and approval given if necessary (there are some instances where missing information will stop an investigation), we send it off for processing. Our solicitors work tirelessly to make sure that every last detail is looked into before anything else can happen!                                                      

Step 6 Release of Funds 

Release of funds can happen shortly after this, as long as the solicitor is a good one. It can help if you have one with specialist bridging knowledge.

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Requirements for a Bridging Loan Application

A lender may ask you to provide the following when you apply for a bridge loan

  • A Valuation Report:

    This doesn’t usually need to be conducted ahead of time as most lenders will have it carried out via their own panel of surveyors. A minority, however, might request that you foot the valuation bill yourself.

  • ID Proof:

    Proof of address (and residency, if applicable) will also be requested.

  • Proof of Exit Strategy:

    This is standard for a bridging finance application. If your plan is to remortgage to settle the debt, then a deal in principle will suffice. The use of non-standard exit strategies such as investments or inheritance may be asked to provide proof that the funds are entering their bank account within a set timeframe.

  • A Business Plan:

    If there is a commercial element to the property borrower is investing in, the underwriters may request a business plan to assess its viability.

  • Evidence of Your Experience in Property:

    This will only be requested by some lenders if the applicant’s plan is to develop a property. They may ask to see evidence of previous projects to examine your track record in the industry.

  • Proof of Income:

    Some lenders will request a diminutive type of income proof (bank statements etc), although this isn’t always necessary as the exit strategy is of greater importance.

How to Get a Bridging Loan

You’ve probably heard of them, but do you know how to get a bridging loan? It’s simple – just ask your mortgage broker or advisor for one. The best way is by searching through all available deals and seeing. Who has the most incentives tailored towards what you need!

Bridging Loans Expert

Your satisfaction is our top priority! We understand how difficult it can be when searching for a loan. So we’ve made sure to offer friendly service and no hidden fees. You don’t need excellent credit or any other type of guarantee. Just come in today with an idea about what kind of bridging finance would work best for you.”

Wrapping Up

So, if you are in the market for a bridging loan. What is the bridging loan application process? First and foremost, it’s important to find a reputable bridging loan provider. Once you have narrowed down your search. Be sure to read over the terms and conditions of the loan very carefully.

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