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Case Study – Purchase within 4 weeks!

bridging financies

Case Study – Bridging loan assists client purchase their dream flat

Periodically, we come across cases which we believe other property investors would be interested to learn about. The summary below is one such case, highlighting the client’s unique requirements and how we provided a solution they were happy with. We hope you find this recent case study helpful.

Scenario

An existing client approached us as they wanted to purchase their dream flat which had just come onto the market.

The Property

The property was a flat which was part of a modern complex in a sought after location in Bournemouth. Due to this, properties in this area do not stay on the market long.

Client’s Requirements

The client wanted to have the upper hand over the other bidders and wanted to act as a cash buyer.

The client had a cash deposit of £100,000 but needed additional funds to purchase the new flat. They approached us for our expertise and advice on regulated bridging to find a solution and to give them the upper hand over other bidders.

Solution

As we know properties can take a long time to sell, therefore the client could not rely solely on the sale of their current main residence to fund the purchase of the new onwards residence.

With regulated bridging, this is a form of short-term finance allowing the client to raise funds quickly to bridge that gap between sale and purchase of the residential property.

The term of the loan is 12 months and there are no early repayment charges for settling the loan early.

The client also owned their current main residence with no mortgage therefore we were able to utilise this as additional security for the loan.

Outcome

This benefited the client in several ways.

First of all, thanks to the combined value of the current flat and purchase flat this gave a total security value of £815,000.

The client only required a loan amount of £350,000 to purchase the new flat. This meant the loan to value was only 42% and thanks to this, the client was able to secure the lender’s cheapest regulated bridging rate of 0.45% fixed per month (equivalent to 5.4% fixed per annum).

This loan balance will then be redeemed upon the sale of the client’s current main residence. As the term is 12 months, this gives the client time to market the property properly and obtain the best price for it.

As we were looking to act quickly on the purchase, we requested the lender carry out an automatic valuation on both the current flat and the purchase flat which the lender was able to accept. These valuations returned instantly. Not only did this save the client time, but this also saved the client an upfront cost of £900 on valuation fees.

Thanks to this the client was able to raise the requested funding quickly and allowed them to purchase their new residential property.

How can Advocate Finance help you?

Are you looking to purchase your new onwards residence, but need to raise funds quickly to secure it like the client in the above case study? If so, Advocate Finance are able to help. We are experts in the regulated bridging market and will be able to find the right solution to suit your personal circumstances.

Get in Touch with Us Today

We provide a FREE assessment on all our services. Please contact us directly for more information, or use the Get in Touch With Us Today feature at the bottom of this page.

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enquiries@advocatefinance.co.uk | 01206 544333
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