Lately, there have been reports circulating about lenders offering non-regulated 90% LTV bridging loans. While experts admit that there is space to improve LTV ratios, 90% is considered a step too far. Bringing that kind of loan onto the market has been described as ‘reckless’ and a ‘recipe for disaster’, according to Mortgage Strategy.
Taking out an 80% LTV bridging loan is quite common in certain parts of the UK, like London, as there is usually enough profit and finance to cover repayment and secure an exit strategy, but 90% is thought to be just too risky.
For a few years, the bridging industry has been working hard to bring in responsible lenders and brokers to offer both regulated and non-regulated bridging loans. However, with such high LTV loans reaching the market, the industry could be in jeopardy. Lending needs to grow at a steady pace and should avoid jumping to 90% LTV so soon.
Get advice from a specialist broker
It is always best to seek financial advice before taking out a bridging loan so you know exactly what is involved and what is expected.
Using a broker has a number of benefits, including expert advice and access to the best deals on the market. It is worthwhile speaking to an adviser who has years of experience who understands the market well and can find a bridging loan tailored to your needs.
Commercial Trust advisors will undertake a comprehensive product search across a wide range of lenders to find a product to match your circumstances. Whether you need to renovate your commercial or buy to let property or inject cashflow into your business, we can help. Call our team on the numbers above or complete our online form.