Buy to Let Bridging Loans in Cathays
Enquire TodayJPM Residential helps landlords and property investors arrange buy to let bridging loans in Cathays.
Buy to let bridging finance provides short-term funding to purchase, refinance or refurbish a rental property before longer-term buy to let finance is arranged.
Whether you are buying at auction, purchasing a property that is not currently mortgageable or carrying out refurbishment before letting the property, we can help you find suitable bridging finance.
What is a Buy to Let Bridging Loan?
A buy to let bridging loan is a short-term loan used to purchase or refinance a property that is intended to be rented out.
Landlords in Cathays commonly use bridging finance when a standard buy to let mortgage is not immediately suitable, such as when a property requires refurbishment or a purchase needs to complete quickly.
Once the property is ready to let, the bridging loan can potentially be repaid by refinancing onto a longer-term buy to let mortgage. Selling the property or using other available funds may also provide an exit strategy.
JPM Residential can help you find bridging finance suited to the property, amount required and your proposed exit strategy.
What Types of Buy to Let Bridging Loans are Available?
Different types of buy to let bridging finance are available in Cathays depending on the property and transaction.
Options can include:
Open Bridging Loans: Provide greater flexibility where the exact repayment date is not known.
Closed Bridging Loans: Have an agreed repayment date based on a clearly defined exit strategy.
Auction Bridging Loans: Short-term finance designed to help complete a property purchase within an auction deadline.
Refurbishment Bridging Loans: Finance used to purchase or improve a property before refinancing or letting it.
First Charge Bridging Loans: The bridging lender takes the first legal charge over the property.
Second Charge Bridging Loans: The bridging loan is secured behind existing borrowing on the property.
The right option will depend on the property, amount required, loan-to-value ratio and how you intend to repay the loan.
What can a Buy to Let Bridging Loan be Used For?
Buy to let bridging loans in Cathays can be used when landlords and property investors need short-term finance before a conventional buy to let mortgage is suitable.
Common uses include:
Purchasing a buy to let property at auction
Buying a property that requires refurbishment
Purchasing an unmortgageable property
Completing a property purchase quickly
Refurbishing a property before letting it
Refinancing existing short-term property finance
Purchasing another rental property
Funding a property while a buy to let mortgage is arranged
A clear exit strategy is normally required because bridging finance is intended for short-term borrowing.
Who can get a Buy to Let Bridging Loan?
Buy to let bridging loans are available to new and experienced property investors, subject to lender criteria.
We can help clients including:
First-time landlords
Experienced landlords
Property investors
SPVs
Property developers purchasing properties to let
Investors purchasing rental properties at auction
Lenders in Cathays will typically consider the property, available deposit or equity, loan-to-value ratio and proposed exit strategy.
Contact JPM Residential to discuss your circumstances and the buy to let bridging loan options that may be available.
How Much can I Borrow with a Buy to Let Bridging Loan?
The amount you can borrow with a buy to let bridging loan depends on the property value, available deposit or equity, loan-to-value ratio and lender criteria.
The lender will usually calculate the maximum loan based primarily on the value of the property being used as security.
If you intend to refinance onto a buy to let mortgage, the lender may also consider whether the proposed exit strategy is realistic.
JPM Residential can review the property and your borrowing requirements to help establish how much you may be able to borrow.
How Much Deposit do I Need for a Buy to Let Bridging Loan?
A deposit of around 25% to 30% of the property value is commonly required for a buy to let bridging loan, although requirements vary between lenders.
This means finance may be available at approximately 70% to 75% loan-to-value (LTV) in suitable circumstances.
The amount of deposit or equity required will depend on the property, loan purpose, proposed exit strategy and lender criteria.
A lower LTV may provide access to a wider choice of bridging lenders and potentially more competitive rates.
How Much does a Buy to Let Bridging Loan Cost?
Buy to let bridging loan interest rates in Cathays are typically around 0.5% to 1.5% per month, although the rate available will depend on the property, loan-to-value ratio, loan amount and borrower circumstances.
Other costs can include:
Lender arrangement fees
Property valuation fees
Legal fees
Broker fees where applicable
Exit fees where charged by the lender
Arrangement fees can commonly be around 1% to 2% of the loan amount, depending on the lender and product.
The overall cost will depend on the interest rate, length of time you keep the loan and any additional fees.
Contact JPM Residential to compare buy to let bridging loan rates and costs based on your requirements.
How do Buy to Let Bridging Loans Work?
Buy to let bridging loans provide short-term finance secured against property, with the loan repaid through an agreed exit strategy such as refinancing onto a buy to let mortgage.
The process normally involves the following stages:
Initial Assessment: We discuss the property, purchase price, deposit, amount required and proposed exit strategy.
Lender Search: Suitable bridging lenders and products are identified based on your requirements.
Application: The application and supporting property and borrower information are submitted.
Valuation: The lender may arrange a valuation of the property being used as security.
Legal Work: Solicitors complete the necessary legal checks and security documentation.
Loan Offer: The lender issues the bridging finance terms and formal offer.
Funds Released: Once the lender's requirements are satisfied, the funds are released.
Repayment: The bridging loan is repaid using the agreed exit strategy, such as refinancing onto a buy to let mortgage or selling the property.
JPM Residential can help you compare buy to let bridging loans and manage the application through to completion.
How Long does it Take to get a Buy to Let Bridging Loan?
A buy to let bridging loan can typically be arranged within 1 to 2 weeks, although straightforward applications may complete sooner.
The timescale depends on the lender, property valuation, legal work, complexity of the transaction and how quickly the required information is provided.
This makes bridging finance particularly useful for auction purchases and other property transactions where completion is required quickly.
JPM Residential in Cathays can help manage the application and liaise with lenders to keep the finance progressing towards completion.
Frequently Asked Questions
Can I use a Buy to Let Bridging Loan for an Auction Property?
Yes. Buy to let bridging loans can be used to purchase rental properties at auction where completion is required within a short timeframe.
The bridging loan can potentially be refinanced onto a buy to let mortgage once the purchase has completed and the property meets the lender's requirements.
Can I use a Buy to Let Bridging Loan for Refurbishment?
Yes. Buy to let bridging finance can be used to purchase and refurbish a property before it is rented to tenants.
Once the refurbishment is complete, you may be able to refinance onto a longer-term buy to let mortgage.
Can I get a Buy to Let Bridging Loan for an Unmortgageable Property?
Yes. Bridging finance can be suitable for properties that do not currently meet the requirements of conventional buy to let mortgage lenders.
You may be able to carry out the necessary refurbishment or repairs before refinancing onto a buy to let mortgage.
Can I Refinance a Bridging Loan onto a Buy to Let Mortgage?
Yes. Refinancing onto a buy to let mortgage is a common exit strategy for buy to let bridging finance.
The property and borrower will need to meet the chosen buy to let lender's criteria when the refinancing takes place.
Can a Limited Company get a Buy to Let Bridging Loan?
Yes. Limited companies and SPVs can apply for buy to let bridging finance, subject to lender criteria.
The lender may assess the company, directors, property, available deposit or equity and proposed exit strategy.
Do I Need an Exit Strategy for a Buy to Let Bridging Loan?
Yes. Bridging lenders normally require a clear exit strategy showing how the short-term loan will be repaid.
For buy to let investors, this commonly involves refinancing onto a buy to let mortgage once the property is ready to be rented.
Get In Touch
JPM Residential can help you find buy to let bridging loan options for purchasing, refinancing and refurbishing rental properties in Cathays.
Whether you are buying at auction, purchasing a property that needs work or require short-term finance before arranging a buy to let mortgage, contact us to discuss the options available.
We cover Cathays (South Glamorgan)