Second Charge Bridging Loans

Bridging Loans are short-term loans secured against property. They can be used as a mortgage to buy the property itself, or as a way of raising funding for any other business purpose. They are known as a bridge or Bridging Loan because they are intended to bridge a short-term funding gap.

They are often used to provide short-term funding while a mortgage can be arranged.

However, they can also be used to raise money on a property that already has a mortgage in place. This is known as a Second Charge Bridge.

Like all Bridging Loans, they are high cost, but once the works are complete and the value of the property enhanced a refinance onto a Secured Loan may be possible, moving the debt to a lower interest rate. A Secured Loan may not be possible initially as heavy works being carried out on a property may mean they are uninhabitable, which would prevent most lenders from using the value of the property as security for a loan.

The uses of Second Charge Bridging does not end there. Many people in need of extra funds use Second Charge Bridging Finance to release funds to purchase investment properties, inject capital into businesses, or make refurbishments while avoiding making changes to their existing mortgage deals

What will a Second Charge Bridge cost?

Short-term finance will always end up being more expensive than long-term lending. Bridging Loans will, therefore, have a relatively high cost, and it is important to understand all the charges involved.

The rate of Interest charged will vary, depending on your circumstances and the scale of funding required. Lenders will also want to know how the loan will be repaid - known as the exit strategy.

In addition to the interest cost, lenders charge an arrangement fee – a fee for setting up the loan. This fee is most commonly 2% of the actual loan amount, although this is sometimes discounted as low as 1%, especially on larger loans. Fees and interest can usually be rolled up and settled with a single repayment.

Why you need Rangewell to find the most appropriate Second Charge Bridging arrangements

Property Funding of all types is very competitive, and many lenders may be prepared to offer funding on a Second Charge basis. Each lender has its own approach to interest rates and fee arrangements and finding and comparing offers demands an expert eye.  

At Rangewell, we have the expert knowledge that can not only help you secure the funding you need - it can save you a great deal of cash.

We can help you use Bridging Loans as a tactical source of funding for the short-term, and then work to find the most competitive source of long-term funding to replace them.