Lets explore what finance options are available for 100% LTV bridging loans and in what circumstances you can get them.
Typically when applying for a Bridging Loan, you can only go up to approximately 85% loan to value (LTV). However there are some circumstances that you may be able to borrow the full value or purchase price.
Bridging loans can be used to buy residential and commercial property in any condition. They are often used by property investors to buy un-mortgageable properties.
They can also be used to raise funds against existing owned property for property investment and business purposes.
Read on to see when you can get a 100% LTV bridging loan or Apply now.
How To Get a 100% LTV Bridging Loan
There are only certain circumstances that you will be able to borrow 100% of a property purchase price or value. The main two circumstances are buying below market value and the other is using additional security.
Typical Features of a 100% Bridging Loan
- Up to 100% LTV
- Terms of 3 – 24 Months
- Rates From 0.6% Per Month
- Fast Completion in 1-2 weeks if needed
- Properties in any condition
- Residential and Commercial
- Across the UK, England, Wales, Scotland, NI
- Unregulated only
Lets looks at the two main ways to get 100 percent bridging below.
100% LTV Bridging For Below Market Value Purchases
A below market value (BMV) purchase is one of the circumstances that you may be able to fund 100% of the purchase price using bridging finance.
There are lots of genuine reasons why people agree to sell property below market value, such as a right to buy clause in leases, quick sales, distressed sales etc.
If you have negotiated a purchase price for a property that is significantly below the Open Market Value (OMV), then some bridging lenders will lend you 75% of the OMV.
So if your negotiated purchase price is at least 25% below the open market value, then it may be possible to get a 100% bridging loan against that purchase.
Purchase Price: £150,000 (75% of OMV)
Open Market Value: £200,000
Gross Bridging Loan: £150,000 (100% of purchase price)
A key thing to keep in mind when buying a property below market value using bridging is the valuation is key. The lender will do either desktop or in person valuation using a surveyor.
The maximum loan amount will be based on the valuation regardless of purchase price or anyone’s opinion.
100% Loan to Value Bridging Loans Using Extra Security
Another way you can potentially get a bridging loan for 100% of a properties value, is by using additional security. So even if you don’t have any cash deposit to contribute, you can use equity in other properties without selling or refinancing them.
This would normally be a first, second or even equitable legal charge over the property.
What Additional Security Can You Use?
- Main Residence/Home
- Buy To Let Residential Property
- Commercial Property
- Trading Premises
- Third Party Guarantor
- Business Assets
Its also possible to do a bridging loan using just a second charge just on its own without any other property as security, potential leaving you to be a cash buyer.
Note: When using another asset as security like your home, you are putting that asset at risk of repossession in the future if you fail to repay the full loan amount. Therefore you need to make sure you are happy with the risk and consult a solicitor for advise.
FAQ: Frequently Asked Questions About 100% LTV Bridging
Can You Get 100% Bridging Finance?
Yes you can get 100% bridging finance but only in certain circumstances. The first circumstance would be when buying a property at below its market value, you could get up to 85% of the open market value. The other way to finance 100% of a property purchase with bridging, is to use extra security. So this could be a first or second charge against your main residence, a buy to let property or other commercial and business property.
How Much Does 100% LTV Bridging Cost?
Prices vary depending on property type, value of the loan and also individual experience or circumstances. Typically bridging loan interest starts at approximately 0.5% per month and arrangement fees could be between 1-3% of the loan amount. Plus there could be other fees for solicitors and other potential costs.
How Do I Get a 100 Percent Bridging Loan?
You can apply for a 100 percent bridging loan if you are buying a property below market value or if you have additional security to offer. There are only a small number of specialist bridging loan providers that offer 100% of purchase price. You can apply direct with them or speak with a broker like Bolton Business Finance to get a quote and guidance with the process.
Can I Get A Bridging Loan With No Deposit
Yes, in some circumstances you may be able to get a bridging loan on a property with no deposit. As explored in this article it would usually require a below market value purchase or additional security.
Can I Use A Bridging Loan For a Below Market Value (BMV) Purchase?
Yes bridging loans can be used when buying a property at below market value. Its possible to go up to a maximum of 85% of the Open Market Value (OMV) regardless of what the actual purchase price is. This could be 100% of the purchase price if there is sufficient discount off the market value.
Apply For a 100% Loan Value Bridging Finance
As an independent property finance broker, we can arrange a Bridging Loan quote for you.
Fill in the form below or call us on 0161 5469128