Bridging finance can be used to fund the purchase or renovation of properties that may be considered unmortgageable due to various issues, such as structural problems, failed EPC ratings, or being deemed non-habitable by surveyors. Here are a few ways bridging finance can be used in such scenarios:
- Property refurbishment: Bridging finance can be used to fund the refurbishment of a property that may not meet the standard criteria for a mortgage. For example, if a property has structural issues, a bridging loan can be used to finance the necessary repairs and upgrades, making it habitable and eligible for a mortgage in the future.
- Property development: Bridging finance can also be used to fund property development projects, such as converting an unmortgageable property into a habitable dwelling. This could involve a complete refurbishment, conversion of a non-residential property to residential use, or even a ground-up construction project.
- Short-term ownership: Bridging finance can be used to purchase a property on a short-term basis with the aim of renovating or upgrading it to a mortgageable standard before selling or refinancing. This could be particularly useful for properties that require significant work before they can be considered for a mortgage, such as those with low EPC ratings or non-habitable properties.
- Auction purchases: Bridging finance can be used to purchase properties at auction that may be considered unmortgageable due to various issues, such as structural problems or non-habitable status. This is because auction purchases usually require quick funding, and bridging finance can be arranged quickly and efficiently.
It is important to note that while bridging finance can provide a solution for properties that are considered unmortgageable, it is a short-term funding solution with high-interest rates and additional fees. Borrowers should seek professional advice and carefully consider the costs and risks involved before taking out a bridging loan for such properties.
About The Author: Sunny Budhdeo
With a career that spans over 20 years, Sunny initiated his journey in the mortgage industry as an adviser at the prestigious estate agency Barnard Marcus. He quickly gained recognition for his expertise, particularly in specialist finance, focusing on complex buy-to-let loans and bridging finance. As the Co-Founder of Unique Property Finance, Sunny has become a linchpin in the industry, adept at solving intricate property finance issues and fostering strong relationships with lenders.
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