75% LTV Bridging Loans
Whether you’re seizing a new opportunity or dealing with a temporary financial gap, a bridging loan can be the key to unlocking your property’s potential.
Bridging loans offer short-term finance, acting as a financial buffer until a longer-term solution is in place.
A 75% loan-to-value (LTV) bridging loan strikes a balance, allowing you to borrow a significant sum while maintaining a comfortable level of equity in your property.
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How we can help
At Respect Capital we understand that exploring the world of bridging finance can be overwhelming, and very time consuming.
That’s why our team of experienced finance brokers is here to guide you every step of the way. We’ll take the time to understand your unique financial situation and goals, then tailor a solution that perfectly fits your needs.
Whether you’re a seasoned property investor or a first-time buyer, we’ll leverage our extensive network of lenders and brokers to secure the most competitive rates and terms available.
We’ll handle all the paperwork and negotiations, leaving you free to focus on what matters most – making the most of your property opportunities.
Contact us today for a free consultation and let us help you unlock the potential of 75% LTV bridging loans.
What’s a Bridging Loan?
A bridging loan is a short-term financing option secured against property or assets. It’s designed to help you ‘bridge’ financial gaps quickly, often when buying a new property before selling an existing one. These loans are popular for property refurbishments, developments, or purchases that need fast completion.
Bridging loans typically last 3 to 24 months. They’re secured against your property, meaning the lender can take ownership if you don’t repay. While they offer quick access to funds, they come with higher interest rates than standard mortgages.
Related: How long can you have a bridging loan for?
How Does a Bridge Loan Work?
Bridge loans provide swift access to cash, letting you move forward with property transactions or projects without waiting for long-term financing. Here’s how they typically work:
- You apply for the loan, providing details of the property you’re using as security
- The lender assesses your application and property value
- If approved, you receive the funds quickly – often within days
- You use the money for your intended purpose
- You repay the loan when your long-term financing comes through or you sell your property
Remember, bridge loans have higher interest rates than standard mortgages. You’ll need a clear ‘exit strategy’ – your plan for repaying the loan at the end of the term.
What Can You Use a Bridge Loan For?
Bridge loans are versatile and can be used for various purposes:
- Buying a new home before selling your current one
- Purchasing property at auction
- Funding property refurbishments or conversions
- Developing land or property
- Meeting short-term business cash flow needs
Here are some specific examples:
- Converting an office to flats under permitted development rights
- Carrying out heavy refurbishments like extensions or loft conversions
- Renovating a property for rent or resale
- Developing a property to qualify for a residential or commercial mortgage
Bridge loans are particularly useful when you need to act quickly in the property market or when traditional lenders can’t meet your timescales.
explore bridging loansWhat is a 75% LTV Bridging Loan?
In simple terms, the loan-to-value (LTV) is the amount you borrow compared to the value of your property.
With a 75% LTV bridging loan, you can access up to 75% of your property’s worth.
The remaining 25% is typically covered by a combination of your deposit and any existing equity you hold in the property.
Who Can Benefit from a 75% LTV Bridging Loan?
Homebuyers with a Healthy Deposit or Equity
If you have a substantial deposit saved or significant equity in your current property, a 75% LTV bridging loan could be the ideal way to secure your next home before selling your existing one.
Cautious Investors
Prefer a lower-risk borrowing strategy? A 75% LTV loan offers a more conservative approach while still providing access to substantial funds.
Cost-Conscious Borrowers
By opting for a lower LTV, you may be able to avoid additional fees or charges sometimes associated with higher LTV loans.
Understanding Loan-to-Value (LTV)
The Loan-to-Value (LTV) ratio is an important concept in the lending world. In essence, it represents the percentage of your property’s value that you’re borrowing. Lenders use LTV to assess the level of risk associated with your loan.
The LTV Equation:
LTV is calculated by dividing the loan amount by the property’s value and then multiplying by 100 to express it as a percentage.
The Impact of LTV:
A higher LTV signifies that you’re borrowing a larger portion of the property’s value. While this can provide access to more funds, it also translates to a higher perceived risk for the lender. Consequently, higher LTV loans may come with stricter eligibility criteria and potentially higher interest rates.
Quick Examples:
Scenario 1
You’re eyeing a property valued at £300,000 and plan to borrow £240,000. The LTV in this case would be 80% (£240,000 / £300,000 x 100).
Scenario 2
The property you’re interested in is worth £400,000, and you intend to borrow £300,000. This translates to a 75% LTV (£300,000 / £400,000 x 100).
Remember, understanding LTV is important when considering any property financing option. It directly impacts the amount you can borrow, the interest rates you’ll be offered, and the overall affordability of your loan.
Loan to value Calculator
Let our LTV calculator do the hard work for you.
Just enter the property price/value and the amount you wish to borrow.
The calculator will then show you what loan to value your proposed loan is.
How Easy is it to Get a 75% LTV Bridging Loan?
Bridge loans at 75% are available, for many lenders this is the maximum they will go to.
If the loan is unregulated, not connected to your main residence, then we do have access to 80% LTV loans.
With higher loan to value percentages, the lender is taking on extra risk. For that they will require a higher interest rate and a really strong exit strategy.
Your exit strategy is how you will pay them back during the loan term. This has to be well thought out and planned. It's possibly the most important part of applying for bridging finance.
Bridge lenders won't normally do a credit search or credit score, so if your credit history is a little chequered then this is to your advantage. However, this is not the case with a regulated bridging loan, where the lender has to take a greater interest in your financial status and affordability.
Are 100% loans available?
In certain circumstances lenders are able to lend you 100% of the value of a property. To do this they need to secure the loan against a second or third property, to give them additional security.
Read more: 100% LTV Bridging Loans
