Bridging can be a quick and cost-effective means of releasing capital tied up in property which can then be used for a wide variety of purposes. In this example, United Trust Bank’s Bridging team was approached to provide a loan to fund part of a divorce settlement. A quick turnaround was vital in order to avoid the customer having to return to court, incurring more legal costs and the ire of his soon to be ex-wife.
The customer and his mother jointly owned a single freehold property in North London consisting of a restaurant on the ground floor and two self-contained flats on the upper floors. One of the flats had been previously occupied by the mother but she had recently vacated ahead of the property being tenanted. The exit was to be through refinancing with a long-term mortgage facility.
However, the refinance would not be straightforward for several reasons. Firstly, the son had a default on his credit file and, although the restaurant and accommodation was high yielding, all properties were held on a single freehold title.
The broker introducer was able to demonstrate to UTB’s team that, despite the challenges, a refinance of the property sufficient to repay the relatively low LTV bridging loan could be arranged.
The £308,000 loan was approved and completed in a short timeframe to meet the divorce settlement deadline and the 12-month term agreed gave the borrowers plenty of time to secure a good longer-term refinance package.
Loan amount: £308,000
Term: 12 Months
LTV: 31%