“Releasing this equity with a second-charge regulated bridging loan can provide customers with a quick and straightforward solution to raising money quickly for a variety of purposes, including purchasing properties not in a suitable condition to use as security for a bridging loan or mortgage”
– Craig Taylor – United Trust Bank
United Trust Bank (UTB) has announced that it has completed a £345,000 second-charge regulated bridging loan to support the purchase and improvement of a holiday let investment property.
The loan enabled the customers to secure a £312,000 property in a sought-after coastal town in the south-west while also covering costs for planned refurbishment works. Once complete, the property will be used as a holiday let.
After reviewing options with their broker, the customers opted to raise the funds by securing the bridging loan against their primary residence. Their main home, valued at £1.6m with an outstanding mortgage of around £210,000, offered sufficient equity to support a second charge loan. This structure also allowed the transaction to proceed quickly, which was a key requirement for the purchase.
Two exit strategies were discussed. The primary plan involves refinancing the holiday let at a valuation of approximately £410,000 once the improvements are finished. This would allow the customers to repay the bridge and recover some of their personal outlay. As a secondary option, they may refinance the first charge mortgage on their main residence, which their joint income is expected to support.
“Homeowners often have substantial equity in their main residences, even if they have first charge mortgages already secured on them,” explained Craig Taylor (pictured), key account manager for bridging at United Trust Bank. “Releasing this equity with a second-charge regulated bridging loan can provide customers with a quick and straightforward solution to raising money quickly for a variety of purposes, including purchasing properties not in a suitable condition to use as security for a bridging loan or mortgage.”
He added, “Although not all lenders are happy to offer second charge bridging loans, regulated or unregulated, at UTB, we have an experienced team of underwriters and credit professionals committed to helping brokers and their customers secure the right solution for their needs and to seize opportunities when they arise.”
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