Everything you need to know about bridge to let finance

If your aim is to be a landlord with several let properties under your belt, there are several ways to support yourself on this venture

Whether your dreams involve buying a home, funding a business venture, renovating a dilapidated building or becoming a successful landlord, you may find that high street lenders feel that your potential purchase or mortgage application is simply too risky to consider. This is where bridging finance is becoming a popular alternative.

Bridging finance is a short term loan which can be used effectively by individuals and businesses alike, until the next stage of their finances comes through or until they manage to sell their existing property.

One such kind of bridging loan is bridge to let finance, which can help you achieve your goals fast. This guide will tell you everything you need to know, so let’s take a look.

What is bridge to let finance?

Bridging finance is designed to be short term. Lenders require borrowers to have an exit strategy in place in order to receive the funds they need, and this can take the form of either selling a property or refinancing it into another kind of mortgage.

Bridge to let loans are specifically designed for use within the buy to let market. They can allow investors to buy a property which they would otherwise struggle to afford with a traditional mortgage. They have the added benefit of having an exit strategy inbuilt – the preapproved refinance onto a traditional buy to let mortgage.

Why would you use a bridging loan?

There are many reasons why someone may choose to opt for bridging finance. For example, you may be waiting to sell your home, but want to snap up a home which has just come onto the market. You may be looking for a property at auction, as auction sales tend to need to be completed within 28 days, which is too short a timescale for traditional mortgages but is plenty of times for a bridging loan.

You may be a property developer who wants to buy and renovate a property, or build on a piece on land, so you can sell it on for a quick turnaround and profit. You may need to repay tax bills where other lenders won’t allow it, or you may just need funding quickly. You may be a landlord who wants to acquire a home which can be let, in which case a bridge to let loan is the optimum choice.

What are the benefits of a bridge to let loan?

Exit finance pre-approval

Bridge to let offers you an exit strategy right off the bat, meaning nothing is left to chance. Like a bridging loan, bridge to let can help you take advantage of an immediate opportunity, but its inbuilt strategy means you don’t need to rely on outside sources of security.

A much faster process overall

The best thing about bridging finance is the speed and simplicity of the process. These loans can be underwritten and completed far quicker than traditional mortgages, often in a matter of days.

You can use it at auction

Most auctions require a deposit as soon as the hammer falls and a full payment within 28 days. Bridging finance can give you access to these funds quickly, so you don’t have to worry about missing out on an opportunity.

You can use it for uninhabitable properties

If you can see the renovation and letting potential in a derelict building or a plot of land, bridging finance can be used to secure this plot and fund its renovation.

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