Along with choosing which bridging loan is most suitable for you, you will need to consider the type of bridging loan you need. This depends on whether you can secure a definite repayment or exit strategy for the loan, as well as whether you’re borrowing with a first or second mortgage. Our guide below covers each type in more detail.
Open bridging loans
This type of bridging loan lets you borrow even if you don’t have a repayment plan or exit strategy in place. Although these are charged at higher rates than closed bridging loans, they provide you with extra peace of mind, knowing you can get funding when you need to. You may need to take out a loan to renovate or refurbish a property but until the work is done, it’s unlikely you’ll be able to secure a definite exit strategy (like a mortgage). This is where an open bridging loan comes in handy.
Open bridging loans are also useful if you want to buy property but have yet to sell other property to finance it. For quick access to funding, we can assess your personal needs to match the most suitable open bridging loan for you. Please visit our open bridging loans page or contact us for further information.
Closed bridging loans
Closed bridging loans are available to those who have a definite exit strategy in place, with a guaranteed repayment method. This may occur when you’ve exchanged contracts on a property and the sale is therefore very unlikely to fall through. If you buy property at auction, you will most likely start to arrange a mortgage and take out a bridging loan at the same time. This shows that you have a definite exit strategy in place, so you can take out a closed bridging loan.
For the best deals and competitive rates, we can search the market to find the right closed bridging loan for your financial situation. For more information, contact us and speak to one of our expert advisers.
First charge bridging loans
Regulated by the FCA, this is where the lender has first legal charge over your property and there is no other mortgage on your property. The lender has priority above all other lenders if you miss repayments and can authorise repossession. Commercial Trust offers first charge bridging loans on buy to let property.
Second charge bridging loans
A second charge loan lets you secure against an existing mortgage on a property if you want to release equity and raise additional funding. The lender takes second charge behind your first charge lender; they therefore don’t have priority over your property.
We offer a range of bridging loans to fund any legal purpose, including commercial, buy to let and renovation loans short-term finance. As a specialist broker, we work with a range of established lenders to find the best deals and rates for your financial needs. As every bridging loan is different, our expert advisers review your situation individually to find the right type of bridging loan for you. Contact us today for more information or to enquire.