A client had an initial enquiry for bridging finance. The client was looking to purchase a commercial property for £150,000 and carry out £25,000 of works to convert it to the upstairs commercial area into residential accommodation under Permitted Development (PD) Rights.
At the time, the client had no cash to purchase the property, therefore needed to raise the funds elsewhere.
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As the client had an unencumbered property worth £100,000, we sourced a lender who could provide a “Cross Charge Bridging Loan” across both properties at 75% LTV. This allowed the client to raise £75,000 against their existing property and provide a loan of £112,500 on the commercial property. The capital raising covered the initial £37,500 deposit for the commercial property purchase, and the remaining £37,500 covers the cost of works, legal fees and interest costs on the loan.
The rate secured for the bridging loan was 0.85% per month due to the commercial property involved, however as it was a cross charge application, it meant only one application was required and one set of legal fees for the lender to help reduce time and money.
As the clients intention is to remortgage the finished semi-commercial property, the benefit of the lender used is that the client can refinance both properties with the same lender onto individual mortgages with minimal legal work, reduced arrangement fees of 0.75% (standard 1.50%) and reduced re-inspection valuation fees to provide a seamless transition from the bridge.
To know more and speak to one of our Bridging Finance Experts, call us now on 03303 112 646. You can also fill in this short online form to get started. Our team of Bridging Loan Experts will get back to you straight away.