Bridging Finance Explained: Beginners' Guide

"What exactly is bridging finance?"
"When should bridging be used and how much is it going to cost me?"
Kevin answers these questions and more in this week's Property Finance Tip.

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[spaceman]

Mr Wright!

Spectacular video.

You've just switched on the light bulb for me!

Many thanks

[JawadAli-sq]

Amazing tips and advice . Thanks so you much.

[rankslav]

This has been very informative thanks for the insights 👍🙏.

[Pradotna]

Easy to understand and great advice mate

[Crypto_with_preston]

Such great advice and information thanks Kevin 😊

[ramoncampoi]

Hi Mr Wright: I have some “stupid” question and would you mind answering them?
- Can I buy a house using residential mortgage and rent it out?
- Can I buy a house using a residential mortgage and add value and refinance it? Or sell it like a flipping? Thank you👍🏼

[Rocky-nd]

Hello, great information there! Do bridging loads also lend for the renovation costs? Or perhaps you have a video explaining this? Thanks Kevin

[davidgray]

Hi Kevin would you get a bridging loan for a few months then get a mortgage or get bridging loan for 12 months giving you time to sell the property

[mumoffour]

Does bridging work for getting a property that’s commercial to change it to residential and remortgaging? Any pit-falls I should look out for?

[microclipzzz]

Is the bridging finance secured against my residential home or the property we would be buying. Also is it 25% of the purchase price or potential price

[mararayp]

Kevin, would someone use a bridging loan to buy a new property because its taking longer than we thought to sell our house?

[demosthenes]

Hi Kevin, many thanks for the time you take to share your expertise around bridging finance. I did some research today and all sources suggest that you can't access bridging finance unless you have an existing property/properties to secure the loan against.

I would like to bid on an upcoming auction with great uplift potential but I don't have an existing property just £50k in cash. I had hoped to secure bridging finance. Am I scuppered? I have heard it's a fool's errand to bid relying on a mortgage in principle as the lender can pull the rug for any reason leaving your 10% deposit down the drain.

Should I just forget auctions and go for a property with a residential mortgage and once I have a property, presumably I will have access to bridging finance as an option?

[jameschallinor]

Hi there, say the property is 100k and the bridging loan is 75k, must the other 25k be provided by yourself in the same way it would a BTL mortgage?

[amakaj]

Hi Kevin
I know bridging loan is asset based but is there something like "bridging principle " ? So I'd know how much I can borrow and in what terms . Also when do I start to pay for bridging loan? After completion or before ?
Thank you

[andyxi]

Hi Kevin...I've just gone through most of your videos and want to say a huge thanks to the incredibly valuable information your'e putting out there. I've got one question regarding using a bridge for your main residence. If we forget about the current restrictions on 90 to 95% LTVs, so in more normal times, is it possible to buy a run down property, bridge and refurb, get a 90 or 95% mortgage, and if you've increased the value enough, actually get cash back. So as an example, 100k purchase plus 25k refurb, combined as a refurb bridge, so deposit 30%=37.5k, loan 87.5k. Done up value 150k, mortgage at 90%=135k. Pay back loan 87.5k to leave 47.5k, therefore net cash back of 10k. Obviously, once you factor in fees, including bridging costs, that cash back will be mostly gone. Or in today's environment, 80% mortgage= 120k - 87.5k = 32.5k. Therefore effective deposit of just 5k + fees etc. Is this possible, and are my figures right? Many thanks.

[Woooshhh]

Where would you go for the bridging loan? I.E who would you go for a bridging loan?

[Dan_Vel_Luka]

Hi Kevin, as always great and valuable content, thank you. One question: How can I release cash from my current property. My current mortgage LTV is around 44% and my mortgage is fixed for next 2 years.

[ashpervaiz]

hi kevin looking to purchase land from parents can i do this via bridging loan

[PP-xgje]

Hi Kevin this is all new to me so got a silly question could bridging loans be used for personal matters kinda like a loan to clear up debts. We’re both full time workers in steady jobs even when the pandemic started. We are planning on up grading to a new house as still have about 110 thousand and about 30 thousand still to pay in a long term loan both payments to the 1 lender. Would the bridging loan company even look at our suitation cheers

[derrollindsay]

Hi Kevin. Can you explain to me how the bridging works when you come to the end of your term on a least option and you haven’t got enough cash to buy? I’ve heard you explain it in a video with Nathan W but I didn’t quite get it. Thanks and great video again