These days bridging loans come in all shapes and sizes. Since UTB increased its BDM coverage across the country and we reduced our minimum loan size to £75,000 and introduced automated valuations, we have seen an increase in applications for bridging loans at the lower end of the spectrum.
In this example UTB was approached to release some capital tied up in an investment property owned by a limited company. The funds would be used to put towards the deposit for the purchase of another investment property and to settle some outstanding credit card debts of the company’s sole shareholder and director.
The security property, a detached 5 bedroomed house in North Yorkshire, had recently undergone a comprehensive refurbishment having been purchased only 4 months prior with the intention of being improved and sold at a profit. The credit card debts were accumulated by the company’s shareholder in funding the refurbishment project, which she now wished to repay.
The house was to be placed on the market for sale prior to commencement of the loan, with the sale proceeds being used as the exit. As the loan met criteria, we did not require a formal valuation to be carried out on the security property and instead relied upon an automated valuation model (AVM) as an indication of the property’s value. This sped up the process and minimised costs for the customer.
The customer was able to draw down funds quickly and this enabled her to purchase a new investment property with the intention of carrying out a similar scheme. The security property is now under offer with a sale expected to complete soon.
Loan Amount – £100k
LTV: 41%