Preparing for a Bridging Loan
Bridging loans are there to be used as a fast way of obtaining finance so you should make sure you know what is required when preparing for a bridging loan.
Here is a quick guide to what you should have to hand before you approach a lender or broker:
- A clear summary of your financial situation. This should include your income and details of where you are raising the deposit that you will be using for the purchase from.
- Full details of the property you wish to buy including written proof of the purchase price. This should all be available from the sales agent or auction house.
- A summary of why you need the bridging loan detailing how much you require. The lender will want to know whether the loan is a bridge for until you have sold another property, or if you propose to renovate and sell, or ultimately rent the property out. If the loan is not for the purchase of property then details of what the loan is being used for need to be provided.
- Details regarding the source of the deposit you are providing. Lenders have a legal obligation to establish where funds are coming from for the purchase of property, including any moneys from third parties.
- Full details of the property, or other asset, that you are prepared to offer as security. This must include the value and details of any other loans secured on it
- A full explanation of how you intend to repay the loan and when. This is also known as an “exit strategy”. The lender will want to satisfy itself that your plans for repayment are realistic.
- Your solicitor’s details. Having this information to hand when preparing for a bridging loan will speed up the process and help you complete your purchase as quickly as possible.
