Short Term Bridging Loan to Secure Glasgow Property Before Refurbishing to a Buy to Let

The Scenario

Our clients approached us having found an exciting investment opportunity – a property in Glasgow that, while needing significant refurbishment, had fantastic buy to let potential.

They couldn’t secure a standard buy to let mortgage on it due to the refurbishments needed, as traditional mortgage lenders weren’t comfortable with the risks.

Confident in the property’s buy to let income potential, they were still very keen to secure the property and had looked into using a short-term bridging loan to complete the deal as an interim solution.

However, they were struggling to secure finance for the following reasons:

• Only a reduced number of bridging lenders can facilitate loans for properties in Scotland
• They only need a small loan of £100k, which is outside of many lenders’ minimum loan requirements
• Their planned refurbishments also needed to be approved by the lender, and not all would be comfortable with the extent of the work.
• While the clients did have development experience, it wasn’t as extensive as many lenders would require for this bridging finance.
• The high loan to value they required was also at the top end of the threshold possible, which reduced their lending pool further.

The Solution

We spoke to our connections at the bridging lenders we knew could take on this type of case.

Although the lending options were reduced for this client due to the complications involved, we rarely see two cases that are the same in bridging finance, simply due to the complex nature of these types of property transactions.

We were therefore well equipped to find a lender comfortable with the risks involved with this case, and we were able to secure the following finance:

• A short term refurbishment bridging loan
• At a competitive rate with a lender happy with the refurbishments
• With no early repayment charges in the case, they finished their renovations early and needed to exit the bridge

In addition, our broker went the extra mile to arrange a potential buy to let remortgaging option for the clients once their refurbishments were complete, to give them peace of mind that they could exit the bridging finance when they were ready.

The process of securing the bridge was efficient and streamlined for our clients, and well within a month, they had the funds in the bank account, ready to complete their purchase.

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