Fast Bridge to Let Loans for Property Investment
If you’re a property investor seeking to purchase a property quickly or one in need of refurbishment, a Bridge to Let loan might be the ideal solution.
These specialised loans bridge the gap between short-term financing and long-term property investment, providing flexibility and speed when traditional mortgages fall short.
At Kerr & Watson, we’re dedicated to guiding you through this complex process, ensuring you get the best possible deal.
What is a Bridge to Let Loan?
A Bridge to Let loan is a short-term bridging loan that transitions seamlessly into a Buy to Let mortgage.
It’s designed for property investors and landlords who need immediate access to funds to purchase or renovate a property and intend to rent it out once it’s ready.
Unlike standard bridging loans, which are usually geared toward selling a property after improvements, a Bridge to Let loan is tailored for those looking to retain the property as a rental investment.
It offers a faster route to securing property while ensuring you have a pre-arranged exit strategy via the Buy to Let mortgage.
How Does a Bridge to Let Loan Work?
Here’s a step-by-step breakdown of how Bridge to Let loans operate:
Initial Bridging Loan
The loan provides short-term funds, enabling you to purchase or renovate the property quickly. Bridging loans are often approved much faster than traditional mortgages, which is crucial for time-sensitive investments, like auction properties.
Property Refurbishment
If the property requires renovations to become mortgageable or suitable for tenants, you can use the loan funds for this purpose. Once the refurbishment is complete and the property is ready for tenants, you move to the next stage.
Conversion to Buy to Let Mortgage
The pre-approved Buy to Let mortgage acts as an exit strategy. You switch to this mortgage once the property is tenanted, making the process seamless and ensuring there is no need to apply separately for a Buy to Let loan.
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Advantages of Using Kerr & Watson
At Kerr & Watson, we handle both the bridging loan and Buy to Let mortgage arrangements, saving you time and reducing stress. Our expert brokers will ensure the transition is smooth and cost-effective.
Benefits of a Bridge to Let Loan
Bridge to Let loans come with numerous benefits, making them a preferred choice for investors:
Speed and Efficiency
One of the most significant advantages is the quick turnaround time. Where traditional mortgages may take weeks or even months to finalise, a Bridge to Let loan can be arranged within days. This is particularly useful for auction purchases or situations where acting fast is crucial.
Pre-Approved Exit Strategy
With a Bridge to Let loan, you have a built-in exit strategy in the form of a pre-approved Buy to Let mortgage. This reduces uncertainty and provides peace of mind, knowing that you won’t be left in a financial limbo once the bridging loan term ends.
Flexibility
These loans are highly flexible and can be used for various types of properties, including those deemed unmortgageable in their current state. Whether it’s a refurbishment project or a property in need of conversion, a Bridge to Let loan accommodates your plans.
Ready to Get Started?
Contact Kerr & Watson today to explore how a Bridge to Let loan can work for you. We will also look at alternative options to ensure you get the correct advice.
Our team is here to guide you through every step.
Eligibility Criteria for Bridge to Let Loans
The criteria for obtaining a Bridge to Let loan differ from standard mortgage applications. Here’s what lenders typically look at:
Deposit and Assets
You’ll need a substantial deposit, usually between 20% and 30% of the property’s value. High-value assets, such as additional properties, can also be used as security.
Property Type and Condition
Bridging lenders are generally more flexible with property types. Properties that are not mortgageable due to their condition, such as those lacking essential amenities, are often accepted, especially if you have a clear refurbishment plan.
Landlord Experience
If you’re an experienced landlord or property developer, your application will be stronger. First-time landlords may face more scrutiny, particularly if the property requires significant renovation work.
Exit Strategy
Your exit plan must be well-defined. In most cases, this involves converting the loan into a Buy to Let mortgage once the property is ready to rent. If the Buy to Let mortgage comes from a different lender, you’ll need pre-approval evidence.
How Much Can You Borrow?
There’s generally no upper limit on Bridge to Let loans, but the amount you can borrow will depend on several factors:
- Property Value: The higher the value of the property, the larger the loan you may secure.
- Deposit Size: A larger deposit increases your borrowing power and may secure better rates.
- Affordability: Lenders will assess whether the projected rental income covers at least 125% of the Buy to Let mortgage repayments.
Example: If you’re buying a property for £400,000, you may need a deposit of £80,000 (20%). Your borrowing amount will then depend on the lender’s terms and your affordability assessment.
How to Apply for a Bridge to Let Loan
Applying for a Bridge to Let loan involves several key steps:
- Consult a Specialist Broker
Working with an experienced broker is crucial. At Kerr & Watson, we guide you through the complexities of bridging finance, ensuring you avoid pitfalls and get the best rates. - Prepare Your Development Plan
If you’re renovating, a detailed development plan is essential. Include costings, timelines, and references for your contractors. Lenders need reassurance that your plans are viable and will turn the property into a profitable investment. - Provide Necessary Documentation
Be prepared to share:- Personal details (address history, date of birth)
- Company information (if applicable)
- Property details, including any sales or valuation data
- Evidence of your exit strategy (pre-approval for Buy to Let mortgage)
- Asset Valuation
If you’re using assets for security, ensure these are acceptable to your chosen lender. We can help match you with lenders who are flexible with asset types.
Conclusion
Bridge to Let loans can be a powerful tool for property investors, offering the speed and flexibility needed to capitalise on opportunities.
However, this type of financing requires expertise. At Kerr & Watson, we specialise in finding the right lenders and structuring your application for success.
Whether you’re an experienced investor or just starting out, our team is ready to support you every step of the way.
