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The Client’s Situation
The clients were high-net-worth individuals who worked in the financial industry and had substantial equity tied up in their current residence. They had been waiting patiently for their ideal family home, and when the right property came to market—a 5-bedroom, Grade II listed residential home—they wanted to move quickly to secure it. Their existing property had significant equity but had not yet been sold.
The Challenge
The clients needed short-term finance with no early repayment charges. They planned to repay the borrowing once their existing property sold, but they could not risk losing the new home by waiting for the sale to complete.
Their preference was to obtain finance covering as close to 100% of the purchase price as possible, because most of their available wealth was invested rather than held as cash. Traditional lenders would base lending purely on the new property’s value, which would not meet this requirement.
Our Solution
We approached a regulated bridging lender who could secure the loan by taking a second charge over the clients’ existing home.
Key figures:
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Current home value: £1,100,000
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Existing mortgage on current home: £60,000
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Purchase price of the new property: £1,250,000
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Lender maximum LTV: 75%
By taking a second charge over the existing residence, the lender could base their lending on the combined value of £2,350,000, rather than just the new property alone. This meant:
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The required £1.25m became just 53% LTV, well within the lender’s criteria.
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The clients could receive 100% of the purchase price funded.
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They qualified for the lender’s cheapest rate of 0.5% per month (6% per annum).
The interest was fully rolled up over the 12-month term, with no minimum interest period, so they would only pay interest for the period the loan was actually used.
The bridging loan will be repaid from two sources:
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The sale of the current home
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A residential mortgage on the new property (for a relatively small balance)
The Result
The clients successfully completed the purchase of their dream home quickly and without issue. The second-charge bridging structure allowed them to borrow 100% of the purchase price, secure the lowest available rate, avoid early repayment penalties, and preserve their investment capital.
Client Feedback
“We dealt with Henry at the outset of our initial enquiry for bridging finance to enable us to purchase our dream property. With speed being of the essence to enable our offer to be accepted, Henry was with us every step of the way, and was incredibly efficient and supportive in getting the transaction across the line. We couldn’t recommend him and Advocate Finance enough and look forward to working with them again at some stage in the future.”
How We Can Help You
If you have significant equity in your current home but need to move quickly on a new residential purchase, we can structure a regulated bridging loan to meet your timescales. Whether you need high loan-to-value lending, second-charge solutions, or flexible terms with no early repayment costs, we can help you secure your next home without delay.
