Client circumstances:
Our clients were in the process of purchasing a new property which they intended to be their main residence. With the sale already agreed, they needed to secure £568,000 – and fast – to complete the purchase. While the cost will ultimately be covered by the sale of their existing home, this was not going to be finalised in time.
The clients – who were retirees – also had a share portfolio but wanted to avoid liquidating any of this. Unable to secure a high street mortgage in a short time frame, they urgently needed an alternative source of finance and were already aware of how flexible and versatile a bridging loan could be. Keen to prevent a chain break, their broker immediately got in touch with us.
MT Finance solution:
As the clients’ existing home was unencumbered, we were able to issue a first charge regulated bridging loan of £568,000 which was secured against the clients’ current home and the one they’re purchasing. The loan-to-value was 45% and based against the combined open market value of £1,275,000. The term was set for 12 months.
The benefits:
By taking out a first charge regulated bridging loan, the clients were able to take advantage of the opportunity to purchase a new home without facing a chain break. It also ensured that they could keep their share portfolio intact. The 12-month term gives them plenty of time to sell their current property and repay the bridging loan. If this happens in less than 12 months then they will not incur any early repayment charges or exit fees.