Bridging loans are a great option for individuals looking for quick funding for purchases or business ventures. This interim financing solution provides borrowers with immediate capital in the form of a short-term, interest-only loan that can be secured by the property being purchased or by a currently owned property.
Jubilee 2000 offers clients various quick bridging loan options to meet funding requirements and support purchases. The current Jubilee 2000 lenders are particularly keen to lend to projects in London.
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How to Apply for a Bridging Loan
To begin the application process, simply contact Jubilee with your financing inquiry. It is essential to have crucial information available when you call, including name, address, the security property’s address, as well as the property’s purchase price, appraised value, solicitor’s information and how much funding is being requested, along with your preferred repayment method.
When available during the initial call with Jubilee, this information can help ensure a quick and efficient loan application process. Once the initial application is completed, we will work quickly to finalise the financing request.
An initial application assessment can be completed in as little as two hours, and a Decision in Principle, or DIP, is usually available within 24 hours of applying. Once the borrower has reviewed and agreed to the loan terms, a certified copy of the borrower’s passport and a recent utility bill must be presented.
Before the application can be completed, the lender will require the applicant to pay any initial fees or charges, which will be outlined in the Key Facts Illustration or lending proposal. Once these fees are paid in full, the application will be marked as complete.
Once the work is completed, borrowers can usually expect their funds to be disbursed within 7 to 14 business days. If financing is being used for a refurbishment, site plans, planning consent, and budget costs will also be required before completion.
Security Needed and Typical Terms of a Bridging Loan
The first charge over freehold or extended leasehold properties can be used as security against a bridging loan. For companies, lenders may also require personal or debenture guarantees. Bridging loan terms will vary depending on the specific circumstances of the loan.
In general, bridging loan repayment terms range from 30 to 90 days, but can be extended if the financing is used for a development project. This extension can last up to 18 months, allowing the borrower to complete the project, arrange additional financing, or sell the property.
Upfront Fees Incurred with Bridging Loans
There are some upfront or initial fees associated with obtaining bridging finance. Since lenders incur costs when processing an application and arranging a loan, they seek to recover these costs through initial fees.
These charges are usually outlined as application, valuation, or legal fees. Jubilee provides clients with quotes for all applications that detail these costs and ensure applicants understand how the charges are calculated.
Loan Amounts Available through Bridging Finance
The amount of a bridging loan will vary from one application to the next and is based on several criteria. Depending on the security’s valuation, financing amounts can range from £25,000 to over £50 million.
Bridging loans generally reflect between 65 per cent and 75 per cent of the security property’s value. Project details will also affect the loan amount—purchase, development, and refinance projects will all carry different values to lenders.
Rates and Charges Associated with Bridging Loans
Rates and charges will apply to all products, including larger bridging loans, but the amounts will depend on specific details of the proposed project and other factors. The type of property, its location and current value, the property’s loan-to-value (LTV), and the borrowing terms will all play a role in determining the rates and charges.
Jubilee 2000 will engage several lenders on the proposed application and project to ensure clients secure the best financing deal to meet their needs.
Bridging Loan Repayment Penalties
Bridging loan lenders usually specify a 30-day repayment period for this type of loan. Generally, the borrower will incur no penalties if a full loan repayment is made after this minimum term expires. Make sure to review the offer documentation carefully when considering quick repayment – any early-repayment penalties and minimum-term information will be included in the loan detail documentation we will provide to the client and explained before completion.
Quick Bridging Loans Offer Interest Payment Options
Lenders offer the option to add interest payments to the total amount of the bridging loan. This is usually presented in two ways: lenders offer an interest roll-up option, or they subtract interest payments from the loan amount.
The requested loan amount and details of the proposed project will determine which, if any, of these offers are presented. Jubilee will also outline and explain this information in the loan detail documentation.
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