Bridging Loans
Secure a Fast, Flexible Bridging Loan
At Henry Dannell, we act fast to deliver the finance options you need. Our specialist mortgage advisory team is here to bridge the gap and source funds from a lender who will make the process of obtaining short-term bridging finance seamless, swift, and stress-free.
Navigate the different types of bridging loans to secure the most suitable solution for your unique circumstances. Assessing the feasibility of your borrowing requirements is our priority. We work closely with you to ensure they are aligned to the most suitable lending solution.
Complex Criteria, Simplified
We navigate lending criteria to ensure your application meets lender appetite.
Clarity at Every Step
We are there from enquiry to completion and even help structure your exit.
Speed When It Matters
We move fast to secure funding within days when time-sensitive opportunities demand swift execution.
Please note: a bridging loan is a short-term loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any debt secured on it. The Financial Conduct Authority does not regulate some forms of bridging finance. Bridging finance / loan deals may not be available and lending is subject to individual circumstances and status.
Bespoke Bridging Loans For Your Property Goals
Developing, downsizing, or breaking the chain?
A bridging loan may be the solution you need. At Henry Dannell, our advisors structure solutions aligned to your timeline and strategy.
Bridging loans are possible across many lending types; Commercial Lending, Unregulated Lending, and Regulated Lending.
Our advisors are guided by a deep understanding of auction purchases, development, property purchase, refurbishment, chain break, downsizing and self-builds.
Bridging Finance Tailored to Your Requirements
Over three decades of combined experience equips the team with expertise to navigate unique challenges quickly.
Home movers and downsizers benefit from specialist guidance by regulated mortgage specialists. Developers and Property Investors can access a dedicated team of commercial advisors.
Each team brings expert insight, market access, and personal, end-to-end support throughout the process of securing a bridging loan.
Bridge The Gap With Trusted Advisors
What To Expect When You Choose Henry Dannell
From initial enquiry to completion and exit, your case is placed with a specialist advisor, dedicated to regulated or unregulated finance. Build strong, one-to-one relationships that result in solutions bespoke to your specific requirements and time sensitivity.
Rapid, Reliable Results
A dedicated advisor will support you from enquiry to completion and exit, at speed with a detailed approach.
Strategic, Specialist Solutions
No case is too complex. High-value properties, unique circumstances, and time-critical transactions are our speciality.
Precise, Partner Process
We liaise with lenders and solicitors to make your mortgage process smooth and stress-free.
Your Guide to
Bridging Loans
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Client Success Stories
Delivered by bridging loans - a leading solution for short-term requirements.
Successfully Secured €5M Bridging Loan in Italy
Our Italian client pursued a €5,000,000 property acquisition, seeking a loan covering the full property value and completion within 5 weeks. This case showcases Henry Dannell's expertise in high-value property financing, demonstrating our ability to collaborate with professional introducers and deliver tailored finance solutions.
Bridging Loan | Quick Completion
We found a solution that allowed the client to complete on their dream property and exit their bridging loan onto a standard mortgage, once the high street lender had concluded their underwriting.
Short-Term Bridging Finance
Using our market knowledge and well-established relationships with Specialist Finance lenders, we were able to source a lending solution to meet the client’s requirements and deadline. During this period, rates throughout the market were also being increased, however, with our well-established relationship with the lender, MTF were able to honour...
Specialist Commercial Finance
Despite complexities, through our diligent efforts and well-established relationships with lenders, we were ultimately successful in securing the financing our client required.
Please note: a bridging loan is a short-term loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any debt secured on it. The Financial Conduct Authority does not regulate some forms of bridging finance. Bridging finance / loan deals may not be available and lending is subject to individual circumstances and status.
A Short-Term Facility In A Short Time Frame
'I highly recommend Matt Karagul and Henry Dannell. Matt was professional, efficient and, most importantly, he was respectful and sensitive to the difficult issues relating to my situation. I was able to secure a short term facility in very short time frame which relieved a great deal of worry and I am very grateful.'
Google Review
Related Services
Our Insights
Maximise Your Homebuying Strategy: The Advantages of a Bridging Loan
Have you found a new property that you wish to purchase, but won’t be able to sell your current home simultaneously? In this scenario, a bridging loan may be the solution you need. While you may have other assets...
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The Benefits of Using a Mortgage Adviser for Your Bridging Loan
If you’re considering taking out a bridging loan, seeking expert guidance from a mortgage adviser to support you throughout the process can be invaluable. Here are five reasons to consider using a mortgage adviser: In-depth Market Knowledge: Mortgage advisers have a...
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High-Value Mortgages: Understanding Lending Options and Limitations
Understanding potential limitations in qualifying for high-value mortgages means borrowers can make informed decisions about securing financing for their property ownership goals. Borrowers seeking a high-value mortgage can struggle to find a lender to meet their needs. Often this is because high street...
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Maximise Your Homebuying Strategy: The Advantages of a Bridging Loan
Have you found a new property that you wish to purchase, but won’t be able to sell your current home simultaneously? In this scenario, a bridging loan may be the solution you need. While you may have other assets...
Read More
The Benefits of Using a Mortgage Adviser for Your Bridging Loan
If you’re considering taking out a bridging loan, seeking expert guidance from a mortgage adviser to support you throughout the process can be invaluable. Here are five reasons to consider using a mortgage adviser: In-depth Market Knowledge: Mortgage advisers have a...
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High-Value Mortgages: Understanding Lending Options and Limitations
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What is a Bridging Loan?
Residential Bridging Loans
A bridging loan is a short-term loan that is typically used to bridge the gap between buying a new property and selling an existing one. It is often used in situations where a borrower needs quick access to funds to secure a new property purchase, but hasn’t yet found a buyer for their current property.
Auction Finance
A bridging loan can be used when purchasing an auction property. With this type of purchase, time is of the essence as auctions typically have tight deadlines for payment. Bridging loans can be a useful financing option for buyers looking to acquire auction properties quickly. At Henry Dannell, we can also look to pre-arrange the exit, providing you with the certainty of exit via refinance, where possible.
Property Development Finance
For property development projects, short-term finance can cover the costs of purchasing land or property, as well as financing the construction and renovation expenses. A bridging loan allows a quick acquisition for property developers and the ability to start projects without delay.
How does a Bridging Loan work?
Application and Approval
Upon application, the lender will assess your creditworthiness (credit score), the value of the property or properties being used as collateral, and your exit strategy. If approved, the lender will provide you with the loan amount and terms, including the interest rate and loan term.
Collateral
Bridging loans are usually secured loans, which means you would need to provide collateral to secure the loan. This could be the property that is being purchased, another property you own, both or other assets. The value of the collateral determines the loan amount you can borrow, and the lender may conduct a valuation to assess the collateral’s worth.
Loan Amount and Interest Rate
Bridging loans are calculated on the basis of the Loan-to-Value (LTV). Rather than calculating the LTV using the loan amount on day one, the LTV is calculated by including the rolled-up interest that would be incurred over the full term of the loan. Bridging loans, if taken on a short-term basis, can be a less expensive solution when compared to other types of loans. However, when comparing a bridging loan taken over a 12-month term to another loan taken over the same term, a bridging loan will typically have higher interest rates. They are also considered higher risk due to their short-term nature and urgency.
Loan Term and Repayment
Bridging loans are designed as short-term financing options, with loan terms ranging from 6 to 18 months. Although, in some cases they can be redeemed within days. The specific term offered depends on the lender and on your individual needs as the borrower. Throughout the loan term, the interest is usually rolled into the loan and paid upon redemption, but you also have the option to pay the monthly interest separately.
Exit Strategy
It’s crucial to have a clear exit strategy in place when taking out a bridging loan. This typically involves having a plan to repay the loan, such as selling the property, refinancing with a traditional mortgage, or using other sources of funds to repay the loan within the agreed-upon term.
Costs and Fees
In addition to the interest rate, bridging loans may also have other costs and fees, such as arrangement fees, valuation fees, legal fees (for your own solicitor and the costs of the lender’s solicitor), and, in some instances, exit fees (though this is not standard). It’s important to carefully review and understand all the costs and fees associated with the bridging loan before proceeding.
Risks
Like any type of loan, bridging loans come with risks. If you fail to repay the loan according to the agreed-upon terms, you could risk losing the property if not repaid within the agreed term. While you can ask for an extension, if granted, this can be costly and may impact your credit score. It’s important to carefully assess your ability to repay the loan and evaluate the risks involved before taking out a bridging loan.
Frequently Asked Questions
Regulated and unregulated bridging loans differ in the level of regulatory protection they offer to borrowers.
Regulated bridging loans are subject to regulations set by the Financial Conduct Authority (FCA) and offer greater consumer protections. They are typically used for residential properties that are either owner-occupied or intended for occupation by a close family member. Borrowers of regulated bridging loans have the benefit of certain consumer rights, such as receiving clear and transparent information about the loan terms, interest rates, fees and charges, as well as access to the Financial Ombudsman Service (FOS) for dispute resolution.
Unregulated bridging loans, on the other hand, do not fall under the regulatory framework of the FCA and are typically used for non-residential properties or investment purposes. Borrowers of unregulated bridging loans do not have the same level of consumer protection as they do with regulated loans, and the terms and conditions of the loan are negotiated directly with the lender. Unregulated bridging loans may have higher interest rates, fees, and fewer legal requirements compared to regulated bridging loans, but they also offer greater flexibility in terms of loan terms and eligibility criteria.
Open and closed bridging are two types of bridging loans that differ based on the timeline for repayment and the availability of an exit strategy for the borrower.
Open Bridging Loan: An open bridging loan is a type of bridging loan that does not have a fixed repayment date or a specific exit strategy in place. This type of loan is typically used when the borrower has not yet secured a long-term financing solution, such as selling a property or obtaining a mortgage, and requires flexibility in the repayment timeline. Open bridging loans are generally considered higher risk by lenders due to the lack of a clear repayment plan and may come with higher interest rates and fees as a result.
Closed Bridging Loan: A closed bridging loan has a predetermined repayment date and a clear exit strategy in place. This type of loan is typically used when the borrower has a defined plan for repaying the loan, such as the sale of a property or the completion of a mortgage application, within a specific timeframe.
Interest rates on bridging loans typically work differently compared to traditional mortgages or loans, as they are short-term loans designed to provide temporary financing until a longer-term solution is obtained. Here are some key aspects to consider when understanding interest rates for bridging loans:
Higher Interest Rates
Bridging loans generally come with higher interest rates compared to traditional mortgages or loans, assuming the loan is retained for the full term. This is because they are considered higher risk by lenders due to the short-term nature and urgency of the loan, as well as the potential lack of a clear repayment plan or exit strategy.
Payments
Bridging loans do not typically require monthly payments, as they often come with a rolled-up interest feature. Rolled-up interest is added to the loan amount and repaid at the end of the loan term or upon redemption. However, borrowers also have the option to choose monthly interest payments, which require regular payments throughout the loan term. While less common, this option may be chosen by clients who need a higher day-one loan, as making monthly payments will reduce the overall Loan-to-Value by preventing interest from being added to the loan through monthly roll-ups.
Interest Calculation
Bridging loan interest is calculated based on the monthly rate applied to the loan amount, but it is calculated over the entire term of the bridging loan. This means that the borrower pays interest on the full loan amount for the duration of the loan term, regardless of whether they have utilised the full loan amount (interest roll-up) or not.
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