A second charge bridging loan is a type of short-term financing secured against a property that already has a mortgage or loan. This type of loan is commonly used to “bridge” a gap in funding, often for property transactions or renovations, before longer-term financing can be arranged. It is called a “second charge” loan because it ranks behind the first charge loan (the primary mortgage) in terms of repayment priority.
OUR PRODUCTS
Discover REIM Second Charge Bridging Loans
Minimum Loan: £100,000
Maximum Loan: £1,000,000
LTV: up to 70%
Interest Type: Retained or Serviced
Location: England & Wales
Critera
- Residential Only
- Available to individuals, Ltd Companies
- Minimum applicant age – 18 years
- We assess all bridge loans on an individual basis
Further Details
Key Features
Short-Term Financing
Typically lasts between 1 to 18 months but can last longer.
Secured Loan
Secured against the borrower’s property which already has a first mortgage.
Quick to Arrange
Can be arranged faster than traditional loans, making it ideal for urgent funding needs.
Flexible Use
Can be used for a variety of purposes including property purchase, renovation, business funding, or preventing property repossession.
How It Works
Eligibility
The borrower must have equity in the property used as security. Lenders assess the borrower’s financial situation, creditworthiness, and the property’s value.
Valuation
The property is professionally valued to determine the available equity.
Loan Amount
Typically, up to 70% of the property’s value (considering existing mortgages).
Repayment
Can be interest-only or rolled up into the loan amount. Full repayment is expected by the end of the loan term, often through refinancing or sale of the property.
When to Use a Second Charge Bridging Loan
Property Purchase
To quickly secure a new property while waiting for the sale of another.
Renovation
To finance property improvements which will increase its value.
Business Needs
To cover short-term business expenses or take advantage of a business opportunity.
Preventing Repossession
To pay off existing loan on the security and avoid losing it.
Pros of Second Charge Bridging Loans
Speed
Fast access to funds, often within days.
Flexibility
Can be used for various purposes.
Leverage Equity
Utilize the existing equity in a property.
