At Bridging Finance, we pride ourselves on offering tailored financial solutions that enable our clients to move quickly in the property market. In this case study, we explore how we helped a client secure a bridging loan to purchase their dream home without waiting for the sale of their existing property.
The Challenge
Our client, a family of four, had found their forever home in a highly competitive property market. With several interested buyers and offers pouring in, they were determined not to let the opportunity slip away. However, the sale of their current home was delayed, and they faced a common hurdle—being stuck in a property chain.
Time was of the essence, and they needed a solution that would allow them to proceed with the purchase before their existing home sold. Traditional mortgage options were too slow, and the family feared losing the property to another buyer.
Our Solution
After an initial consultation with one of our brokers, it became clear that a bridging loan was the ideal solution, and we reassured them about the logic behind their plans and explained the process, costs and risks in detail.
Key Steps We Took:
- Assessment and Eligibility We calculated the client’s loan-to-value (LTV) ratio using the combined value of the new property and their existing home. With an LTV well within acceptable limits, the client was eligible for a competitive interest rate.
- Free Quote and Decision in Principle Within 24 hours, we provided the client with a detailed free quote outlining the expected costs and terms of the bridging loan. We also secured a decision in principle from the lender providing the best offer, which gave them the confidence to proceed with an offer on the property.
- Handling the Valuation and Legal Work Once the client’s offer was accepted, we facilitated the property valuation and worked closely with the lender’s solicitors to ensure a smooth process. Given that the property was below £1 million, the lender agreed to a desk-based valuation, saving both time and costs for the client.
- Quick Fund Release After receiving the final approval, the funds were released in just 14 days. This enabled the client to complete the purchase quickly and without any delays.
- Ongoing Support Throughout the entire process, our team remained in close contact with the client, providing updates and ensuring all parties were aligned. We also helped them plan their exit strategy—repaying the loan once their existing home was sold.
The Costs
- In this case, the client needed to borrow £500k for the new property, and already owned their current home mortgage-free, valued at £400k.
- This put their LTV at 60%, and the interest rate they achieved was fairly low at 0.68% per month.
- Their existing home sold after 8 months of securing the loan, meaning they only paid for 8 months of interest, coming to £39,418.
- Their other costs (legal fees and admin charges) came to only £2,500 (no broker fees), meaning the total cost for their bridging loan was £41,918 (roughly 8.3% of their loan value.
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