Bridging Loan to purchase run down property

Deal Structure

80% Loan to Value Net

Interest at 0.95% per month

2% Arrangement Fee

No Exit fees

12 months term

Deal Summary

A  developer client with plenty of experience wanted to purchase a house in Knutsford which had planning permission for an extension, converting the existing run-down 2 bed detached property into a modern 4 bed house.

Client wanted to borrow 80% as a “net” loan amount for the acquisition and he had his own funds to carry out the works on the property.

Most lenders preferred a structure where the cost of works was included in the facility and the client then put his “works” funds towards the purchase on day 1. Our client didn’t want to get involved in on-going monitoring, waiting for a QS to visit and then having the “hassle” of further draw-downs, hence he preferred a higher day one loan amount.

We found a lender that was happy with his proposed structure.

Client is very happy with the flexibility the facility provides, and if everything goes well with this project he expects this deal to be the first of many with the lender.