I’m surprised at how many enquiries I get from clients who taken out bridging finance through another broker who has not got a firm exit in place.
If you don’t have the funds to repay it there are only two ways it can be repaid, either the sale of the property or a remortgage.
With the remortgage, before you take out the bridge you need to ensure that both you and the property meet as many lenders criteria as possible. If you have only one lender to choose from, then in 6 months they not be lending in that market or at that LTV. That’s dangerous and can cause you a lot of problems.
If you are late repaying the loan most lenders increase the monthly interest rate which will quickly wipe out any equity you have in the property.
So focus on the exit before you take the bridge.
Tags: Bridging