BRIDGING

Bridging loans are a short term finance, which can be used by clients for a variety of purposes.

At Diamond Property Finance, we provide efficient, effective, and speedy bridging loans to individuals, sole traders, partnerships, and limited companies.

Our range of bridging loan products covers a variety of needs, including:

  • Auction purchases with quick completion timeframes
  • Chain breaks to bridge the gap between expected or unexpected purchases
  • Light or heavy refurbishments, for small or large renovation projects
  • Development loans, for smaller development projects
  • Below market value purchases, for discounted acquisitions
  • Capital raise, for almost any purpose.

FREQUENTLY ASKED QUESTIONS

What is a bridging loans?

A bridging loan is short-term financing designed to bridge a gap between the purchase of a new property and the sale of an existing one. It provides immediate funds, allowing individuals or businesses to proceed with property transactions while awaiting long-term financing. Typically, it’s a temporary solution to cover the interim period between property transactions.

How do bridging loans work?

Bridging loans work by offering quick access to funds, enabling borrowers to secure a property promptly. They are often used when there’s a delay in selling a property, and immediate capital is needed for a new purchase. The loan is secured against the borrower’s existing property or the one being purchased. Once the property is sold or long-term financing is arranged, the borrower repays the bridging loan, including interest.

How much do bridging loans cost?

Bridging loans in the UK typically cost 1-2% of the loan size as an arrangement fee charged by the lender, plus monthly interest rates ranging from 0.45% to 2%. Other fees to consider include valuation or survey fees, legal fees, broker fees, and other admin fees such as drawdown and redemption fees. The total cost of a bridging loan can vary depending on the lender, loan amount, and loan terms. It’s important to note that bridging loans are typically short-term loans, and interest is calculated monthly to ensure you only pay interest on the months you have the loan for.

How long do bridging loans take?

Bridging loans are known for their speed. The approval and funding process can take anywhere between 72 hours to two weeks to complete, depending on the lender and the individual’s circumstances, making them a swift solution for urgent financial needs. However, the exact duration depends on factors such as the complexity of the transaction, property valuation, and the efficiency of the involved parties.