A bridging loan is a short-term interest-only loan available to those that need access to capital quickly. Traditionally used for a property purchase, it is a loan to ‘bridge’ the gap while other finance (such as a mortgage or sale of property) is secured by the borrower. Bridging can also be used for a remortgage of a customers existing security or can be secured by way of a second charge. Bridging finance is secured, meaning the borrower uses property (or land) as security to the lending institution.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1658324491663,"hs_deleted_at":0,"hs_id":79661456446,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664538347628,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What is a Bridging Loan?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Anyone can apply for a bridging loan, either as an individual or a limited company.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1658401069161,"hs_deleted_at":0,"hs_id":79799294057,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126252534,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Who can apply for a Bridging Loan?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Bridging loans are mainly used by clients who need quick, short-term capital to fund a property purchase. They include those who:
\n- \n
- Broken Property Chains - A bridging loan can be used to fix a broken property chain. \n
- Un-mortgageable - If a property is unmortgageable, such as a house without a kitchen or bathroom, borrowers can use a bridging loan to purchase it. \n
- Renovations / Conversions - A bridging loan is an option if a borrower's goal is to renovate a property with the aim of adding value to sell at a higher price. \n
- Lease Extensions - Purchasing a property that has less than 80 years left on the lease can be challenging, as the banks may decline the mortgage. \n
- Planning Permissions - If your client wanted to purchase land or property for the sole purpose of getting planning permission (or use change) and then re-selling, a bridging loan could finance that transaction. Land with planning permission granted commands a higher value, so they could sell on for a profit or alternatively develop it themselves, exiting on to a development finance facility. \n
- Auction Purchases - When purchasing a property at an auction your client will usually have to pay a deposit 10% of the full price on the day of the auction - and will have up to 28 days to pay the remaining funds. A bridging loan can be very helpful when they need access to money fast, so many people use bridging loans for this purpose and then repay the loan once they have the mortagge. \n
A second charge mortgage is a secured loan against a client's property, that gives them access to the equity they hold in it. As such, it is only available to property owners. It’s called a ‘Second Charge’ mortgage simply because the primary mortgage on a property is referred to as the ‘First Charge’ mortgage.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1658401635223,"hs_deleted_at":0,"hs_id":79800034138,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126192505,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What is a Second Charge mortgage?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Flexible: Maybe the borrower is self-employed and lending criteria have tightened since they took out their first mortgage. Or perhaps they’re credit-impaired, at the salary multiple limit.
Fast: Second Charge mortgages can complete quickly. This can be days or weeks. Typically, 3-6 weeks.
Functional: There are cases where a Second Charge might also be appropriate. For example, they can sometimes simply prove cheaper than remortgaging – particularly if your client faces heavy early repayment charges.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1658401652388,"hs_deleted_at":0,"hs_id":79804998965,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1663853048962,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What are the main benefits of a Second Charge mortgage?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Any property-owning individual can apply for a second charge mortgage with Aria Finance.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1658401689569,"hs_deleted_at":0,"hs_id":79804998968,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662556924856,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Who can apply for a Second Charge mortgage?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"- \n
- Home improvements \n
- Second property deposits \n
- Tax debt repayment \n
- Business finance \n
- School fees \n
Where a second charge mortgage is used to buy property, the borrower can apply for:
\n\n- \n
- Up to 100% loan-to-value on residential properties \n
- Up to 75% loan-to-value for clients with credit problems \n
- \n
- Property development finance is a type of short-term, secured finance that is used for many small, medium, and large-scale property projects, including renovations, office block conversions or to purchase and build on previously undeveloped land from the ground up. \n
- Development finance is used by many different types of people from private individuals to portfolio developers and small to large companies \n
- Unlike a traditional mortgage, development finance is a short to medium-term loan that is secured against the projected gross value rather than the current value of the land/property. It can be complicated so it is beneficial to use an experienced broker, like Aria Finance. \n
Examples of non-standard properties might include:
\n\n- \n
- Serviced accommodation and student residences \n
- Houses in Multiple Occupation (HMO) \n
- Multi-unit properties with one title deed \n
- Freehold properties split into several flats \n
- Flats above shops, including fast food and takeaways \n
- Ex local authority flats \n
- \n
- Someone who has a good credit record \n
- Somebody who can afford to take the risk \n
- A home-owner who will find it easier to get a buy-to-let mortgage \n
- A property investor, specifically those interested in houses or flats \n
- Someone who has a relatively high salary \n
- A person under 70, although older applicants can be considered \n
- \n
- The amount that can be borrowed is based on the rental income achievable. \n
- Generally, the assessment of the affordability of the mortgage payment is based on the rental income the property generates versus the mortgage payment, with an added 45% to cover shortfalls. \n
- The service charges associated with the rental will also be taken into account when assessing affordability. \n
Borrowers looking for an alternative to High Street mortgages this includes but is not limited to:
\n- \n
- Expats \n
- Foreign nationals \n
- First-time buyers \n
- Self-employed (1-year with tax calculation and HMRC Tax Year Overview or accounts) \n
- Professional sportspeople \n
Here are just a few examples of what constitutes a commercial property for commercial mortgage purposes:
\n\n- \n
- Shops (including those with flats above) \n
- Offices \n
- Warehouses \n
- Factories \n
- Workshops \n
- Garages \n
- Hotels \n
- Restaurants \n
- Pubs \n
There isn't a lot we can't lend on. Aria Finance has access to specialist lenders which offer broader criteria including:
\n\n- \n
- No upper age limits \n
- High LTV \n
- Broad property ranges considered, incl. Right to Buy properties, new build, Wattle and Daub, high-rise apartments, concrete properties, Cornish units, Mundic block construction and many more non-standard construction types. \n
- Applicants with adverse credit history considered \n
There are many benefits to bridging loans such as speedy application, quick transfer and broader lending criteria - to name a few. Let's look at these and others in more detail.
\n- \n
- Speedy Application Process \n
- Adaptive Lending Criteria \n
- Repayment Options \n
- Condition of security properties not a factor \n
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661418623252,"hs_deleted_at":0,"hs_id":82987640162,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664546369564,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What are the benefits of bridging loans?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"
We tend to see three main exit routes for bridging finance.
\n \n1. Sale of property – The client may sell the property that the bridging finance has been secured against within the term of the loan to repay the bridging loan. This can also be the sale of an alternative property.
\n \n2. Refinance – This could be the refinancing of the bridging loan with a mortgage or in some case another bridging loan from a different lender (a lender cannot write back-to-back bridging loans on the same property). This would usually need to be evidenced by an agreement in principle.
\n \n3. Cash redemption – The client will need to evidence that a definite cash sum will be made available during the term of the loan, substantial enough to redeem the loan.
\nThere are other exit routes that can be considered alongside these, as long as we are able to obtain evidence they will occur within the term and are deemed viable by the lender, consideration can be made.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661419078972,"hs_deleted_at":0,"hs_id":82981268008,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664547476444,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What are viable exit routes for Bridging Finance?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Ideally, this shouldn’t happen as the exit route will be a major part of the underwriting of the case at outset.
\nThe ability to repay the loan is a fundamental element to the loan being granted in the first instance, but circumstances can change during the loan – if they do and the exit cannot be achieved within the timescales, there are two options. The customer should give as much notice to the existing lender if they foresee any issues in redeeming their loan in time, and we can help to arrange another way of repaying the loan
\n \n1 – Going back to the existing lender to extend the term. This will incur a new set of fees in line with arranging the original loan.
\n \n2 – Rebridging to another lender – however, this will typically be more expensive because the client wasn’t able to exit the bridge within the original loan term and is therefore riskier. It's important to pay off the bridging loan before it expires to avoid paying expensive fees and penalties.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661419131523,"hs_deleted_at":0,"hs_id":82987640170,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664548042450,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What happens if the client doesn't exit the bridge within the agreed term?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Retaining interest on the loan is a common feature of bridging finance. It gives the clients the option of borrowing the interest payments as part of the loan agreement. This means they then do not need to make monthly payments to the loan provider (which can be substantial), nor prove their affordability at the underwriting stage.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661419174572,"hs_deleted_at":0,"hs_id":82981268013,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126298251,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What does retained interest mean?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"If your clients choose to have the interest retained or rolled up, it is important to note what impact this will have on the net loan amount available to the borrower.If the client is looking to achieve the maximum loan to value available, interest and fees can generally only be added up to 75% maximum.
If the exceeds this threshold once interest and fees are added, they will be deducted from the loan instead.
For example, your client wants to borrow £100,000 at 75% LTV and interest rates will be 1% per month.
With a 12-month term and after 2% fees, the net loan amount will be £86,000 As the monthly interest payments of £12,000 and the fees will have to be deducted from the gross loan to ensure the entire borrowing does not exceed 75% loan to value.
It is important to note that the client will only ever pay for what they use. If they elect to retain interest on the loan, but are able to repay the loan before the end of the term they will receive a refund of unused interest.
Again, using the scenario above, if the client where able to repay the bridging loan in month six, and did not require the full 12-months, they would receive a refund of six months' unused interest payment; £6,000 in this example.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661419246339,"hs_deleted_at":0,"hs_id":82981268015,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664548319207,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What’s the impact of retained interest on a Bridging Loan?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"A regulated bridge is if you’re securing funds against what is or will become your main residence, or your family intend to occupy the property. Or if the loan is secured on a property that has been inherited or has previously been occupied by yourself or family members. Unregulated is if you're securing funds against any property which is not your residence and will not become in the future. In terms of length, regulated bridging loans are up to a maximum of 12 months term whereas unregulated bridging loans can go to 24 months in some cases. Also, it's worth noting that some bridging lenders themselves are unregulated and can't offer FCA-regulated bridging loans. ","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661419307657,"hs_deleted_at":0,"hs_id":82987640359,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1703070330310,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What’s the difference between Regulated vs Unregulated Bridging Loans?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"For regulated bridging loans your most competitive rate starts at 0.45% per month, for unregulated bridging rates start at 0.47% per month (as of Sept 2022).","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661419342795,"hs_deleted_at":0,"hs_id":82987640360,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664548342881,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What interest rates can I expect with Bridging Loans?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"The great flexibility of bridging often ties into the associated expense of bridging loans. Most lenders will allow borrowers the flexibility to pay the loan back at any time without penalties, as well as retaining interest into the loan so that cash outflows can be managed, and to secure on most types of properties including houses, flats, commercial units, land with planning, uninhabitable, and un-mortgageable properties.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661419370079,"hs_deleted_at":0,"hs_id":82981268016,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126306466,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How flexible are Bridging Loans?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"
Unlike a standard, high street residential mortgage, bridging loans are underwritten with less focus on formal criteria, affordability and credit checks and more focus on the strength, viability and plausibility of the client’s exit strategy to pay off the loan and the quality of the asset offered as security - rather than the client’s ability to pay.
Of course, there will still be formal identification checks in order to prove identification of borrowers to lenders.
\n
\n
\n
\n
If your client defaults on their mortgage, the First Charge takes precedence over the Second Charge, which means that the Second Charge lender may not be left with enough residual equity from the repossession to repay their loan.
\nAs a result of this increased risk, they recover the loan through higher monthly interest rates.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661933879927,"hs_deleted_at":0,"hs_id":83526019730,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1663853027043,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Why are Second Charge mortgage interest rates higher than traditional (FIrst Charge) mortgages?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"The flexible nature of Second Charge mortgages presents a higher risk to the lender, which is reflected in the interest rates. Also, the case has to be transacted by a specialist broker who will incur processing costs.
\nHowever, with our expert service, we will be able to ensure the product is the best available for your client.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934300971,"hs_deleted_at":0,"hs_id":83526019735,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1663853009019,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How can I explain the costs of a Second Charge mortgage?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Yes, Second Charge mortgages are regulated by the FCA and practices adhere to the same rules as the First Charge market.
\nThey are no different from a First Charge mortgage except they rank second on the title deed of the property.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934349210,"hs_deleted_at":0,"hs_id":83526019738,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1663853306860,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Are Second Charge mortgages regulated?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Second Charge mortgages are extremely flexible in their range of criteria, speed and uses, which has proven appeal to a wide range of borrowers. As an ideal way to raise funds from existing equity without disturbing their First Charge mortgage, Second Charges can be accessed by both individuals and landlords, are mostly without ERCs and offer loan sizes from 6 times income.
\nThey are used for a variety of reasons such as debt consolidation, home improvements, tax debt clearance, property deposits, school fee payments and business financing – in fact, any legal purpose. By securing against a property, the borrower will gain the ability to consider longer-term borrowing that is not available through unsecured lending (which is typically restricted to a maximum of 7 years on a repayment basis).
\nAn unsecured loan is typically capped at £25,000 – with a Second Charge mortgage, borrowers will have the ability to borrow more than this, typically up to £2 million (subject to the equity in their property).
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934381642,"hs_deleted_at":0,"hs_id":83526019740,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1663852978561,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How flexible are Second Charges mortgages?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Lenders that operate in the Second Charge market answer to the same regulator as the High Street lenders, the Financial Conduct Authority (FCA) and must abide by their rules and regulations. Currently, High Street lenders do not offer Second Charge products as they require a fully advised sales process, that they cannot currently accommodate or have little desire to do so.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934438499,"hs_deleted_at":0,"hs_id":83526019743,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126319247,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Can I trust Second Charge mortgage lenders?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Depending on the lender, development finance can be used for a broad range of properties including residential, commercial, mixed-use, single and multiple units, ground-up new-build developments, conversions and renovations and development-to-let.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934464240,"hs_deleted_at":0,"hs_id":83526019746,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126321017,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What types of projects can Development Finance be used for?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Subject to lender criteria, typically an individual or limited company can apply for development finance. Many lenders will only lend to those who are able to evidence previous experience of successfully completing an equivalent development project.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934688701,"hs_deleted_at":0,"hs_id":83496505977,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126322867,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Who can access Development Finance?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Three important factors will be assessed for an idea of loan size
\n\n- \n
- The current value of the site with planning or the value of the property before works. \n
- The build costs \n
- The gross development value (GDV) is the end value of a property once works have been completed \n
Typically, lenders will consider up to 65% of the gross development value and up to 100% of the build costs. Many lenders may not consider an application if the total build costs are more than 75% of the GDV. Loan terms are typically up to 18 months.
\nThe size of the loan amount obtainable will also vary with lenders. Aria Finance have experience in funding projects which range anywhere from £150,000 to £25,000,000.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934718042,"hs_deleted_at":0,"hs_id":83526019756,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126324073,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How much money can be borrowed with Development Finance?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Development finance is typically structured in two stages. This begins with the initial day one loan which helps get the project underway. Lenders will consider up to 60% of land purchase price at this stage. Then, the rest of the loan is then drawn down in stages depending on the progress of the project (upon certification from a monitoring surveyor).","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661934852547,"hs_deleted_at":0,"hs_id":83526019758,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126326494,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How is Development Finance structured? ","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Interest rates will be calculated by
\n\n- \n
- The amount borrowed \n
- The percentage borrowed against the overall costs – current value and build costs combined \n
- The loan term required Interest rates typically start at 5.5% and are often calculated annually. \n
These fees will vary across the market
\n\n- \n
- Broker fee – This varies between brokers. Some brokers do not charge a fee and rely on receiving commission from lenders when the loan completes. Other brokers may charge a fixed fee or a percentage of the total loan value. \n
- Application fee – Some lenders and brokers charge for submitting an application \n
- Valuation fee – To calculate an unbiased, accurate value of the security, lenders will typically instruct an independent valuation. This can also include a projected valuation of the project once completed \n
- Arrangement fee – Often calculated as a percentage of the total cost of the loan \n
- Monitoring fees – Development projects are monitored for progress and this typically involves a cost. \n
- Drawdown fees- A fee charged whenever a new instalment of funds is transferred to the borrower \n
- Legal fees – If needed, borrowers will have to pay for legal costs such as hiring a solicitor or qualified legal advice \n
- Exit fee – Often calculated as a percentage of the total cost of the loan \n
- Administration fees - Any additional costs charged by either lender or broker \n
This is the typical process with a broker...
\n\n- \n
- Enquiry for capital raising raised by the client \n
- The broker then reviews mortgage options \n
- If development finance is considered most suitable, the broker will typically refer the case to a specialist finance distributor (SFD) who may have wider access to development finance lenders and more competitive rates o The broker will inform the client that they are being referred to an SFD. They should also discuss with their clients all costs, fees and charges, required documentation, the importance of transparency and the desired exit route. \n
- The SFD then reviews the key case details and... \n
- Assigns the case to an underwriter who assesses the initial suitability of the application \n
- Indicative terms are sent to the client, their broker and an agreement letter to proceed for the client to sign and return \n
- The client is then sent paperwork with a checklist of supporting documents to return to the specialist finance distributor \n
- A third-party surveyor instructed by the SFD visits the site to determine the project’s plausibility – and a valuer for the project’s total value \n
- The formal loan offer and final terms are then sent to the client. At this point, the client may involve their solicitor for legal support and advice on whether to proceed. The loan completes and the day one loan is drawn • This is followed by further drawdowns until the project is complete \n
Different lenders will have their own eligibility checks. They will typically check the borrowers:
\n\n- \n
- Ability to pay the deposit and source of funds \n
- Income (2 year’s SA302) credit and assets \n
- Last 3 months’ personal and /or business bank statements as appropriate to verify rental income on remortgage cases \n
- Proof of ID (certified copy of passport or driving licence) \n
- Proof of residency (utility bill or bank statement) \n
- Lease copy (AST or commercial lease) \n
Expense should be considered in terms of how much the overall cost will be for your client. This can often be categorised in two ways;
1. Financial Benefit - Your client purchases an unmortgageable property for £100,000 at auction. With use of a bridging loan, they are able to complete renovation works of a new bathroom and kitchen, the property sells for £150,000. Once costs have been taking into account from the £50,000 return on the sale, it eliminates the perceived expensive nature of the bridging finance used. It is no longer expensive finance, but the only finance available to achieve this opportunity.
2. Emotional Benefit - A landlord client’s buy-to-let mortgage lender pulls out at the last minute, and they are already in their notice-to-complete period, having already exchanged. With the flexibility of a bridging loan, a case can complete in days – saving the landlords deposit and avoiding losing the investment property as they can still complete on the new purchase and then have a period of 24-months to arrange traditional finance on the property to replace the bridging loan.
The expense of bridging reflects the risk the lender is taking in the lending decision. They operate minimal underwriting and often secure against unmortgageable, unmarketable properties that finance could not be obtained for through traditional routes. Bridging generally carries no redemption penalties, so with some lenders, after the first month, the client is free to redeem the loan.
This all contributes to the higher interest rate the client will be charged above traditional finance.
Although this will vary between lenders, here are a range of properties that can often be financed with Buy-to-Let mortgages:
\n\n- \n
- Serviced accommodation and student residences \n
- Houses in Multiple Occupation (HMO) \n
- Freehold properties split into several flats \n
- Flats near to or above commercial premises such as shops, including fast food and takeaways \n
- Ex local authority flats \n
- Holiday let \n
- Airbnb \n
- \n
- The client gets in touch with their broker seeking options to raise funds for a Buy-to-Let property. \n
- Having conducted a fact-find process, the broker assesses whether a High Street Buy-to-Let mortgage will meet their needs or if they will need to refer the client’s case to a specialist lender, via a Specialist Finance Distributor (SFD) \n
- If the broker decides to refer their client to a SFD, they will let their client know they are being referred and expect a call from them directly. \n
- The SFD underwriter then calls the client and assesses if the client’s circumstances will be suitable for a BTL mortgage. If they are, the underwriter then prepares indicative terms which they send to the client to review. \n
- If the client confirms they are pleased to go ahead with the full process, they are sent all relevant paperwork and a list of underwriting requirements; they can then complete the required paperwork, pay any upfront fees required, gather the required documentation and send it back to the SFD. \n
- The underwriter pre-underwrites the deal, ensuring it’s complete for the lender. They then send the application to the lender to get formal approval in principle \n
- The lender issues the Agreement in Principle (AIP) to the client through the SFD and requests any further supporting documents. \n
- Once the client returns the required documents to the SFD, the underwriter will re-evaluate the case and instruct a valuation. \n
- Once the valuation is received, the SFD packages the case and submits it to the lender. \n
- The lender does a final underwrite of the loan and approves it. They then issue a formal offer, with additional documentation to sign including; the offer itself, legal charge permission and proof of buildings insurance. \n
- The client signs and returns the final documents to the SFD who forwards them over to the lender who instructs the solicitors when received. \n
- Once all legalities have been finalised the funds are released to the borrower \n
These fees will vary across the market:
\n\n- \n
- Broker fee – This varies between brokers. Some brokers do not charge a fee and rely on receiving commission from lenders when the loan completes. Other brokers may charge a fixed fee or a percentage of the total loan value. \n
- Application fee – Some lenders and brokers charge for submitting an application \n
- Valuation fee – To calculate an unbiased, accurate value of the security, lenders will typically instruct an independent valuation. This can also include a projected valuation of the project once completed. \n
- Arrangement fee – Often calculated as a percentage of the total cost of the loan \n
- Legal fees – If needed, borrowers will have to pay for legal costs such as hiring a solicitor or qualified legal advice \n
- Exit fee – Often calculated as a percentage of the total cost of the loan. There are some commercial mortgages that do not have exit charges. \n
- Administration fees - Any additional costs charged by either lender or broker \n
Different lenders will have their own eligibility checks. They will typically check the borrowers:
\n\n- \n
- Cash flow \n
- Outstanding debts \n
- Projected business income \n
- Ability to pay the deposit and source of funds \n
- Income (full accounts of trading business) credit and assets \n
- 2 year's trading accounts \n
- Last 3 months’ business bank statements \n
- Proof of ID (certified copy of passport or driving licence) \n
- Proof of residency (utility bill or bank statement) \n
Although this will vary between lenders, here are a range of properties which commercial mortgages may suit:
\n\n- \n
- Shops \n
- Offices \n
- Factories \n
- Warehouses \n
- Restaurants \n
- Pubs \n
- B&Bs \n
- Working farms \n
- Mixed usage properties \n
Minimum loan sizes typically start at £20,000 and can range anywhere into and beyond £25 million (subject to criteria). This range will vary between lenders.
\nTypical repayment terms are up to 25 years.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661937489831,"hs_deleted_at":0,"hs_id":83526020129,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126470498,"products":[{"createdAt":null,"createdByUserId":0,"id":6,"isHubspotDefined":false,"label":"commercial-mortgages","labelTranslations":{},"name":"commercial-mortgages","order":5,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How much money can be borrowed with Commercial mortgages?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Lenders will typically consider up to 75% loan-to-value (LTV). So, you will need to have a deposit available anywhere from 25% and above, depending on the lender’s criteria and your desired interest rates. This will vary between lenders.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661937612659,"hs_deleted_at":0,"hs_id":83496506368,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126471503,"products":[{"createdAt":null,"createdByUserId":0,"id":6,"isHubspotDefined":false,"label":"commercial-mortgages","labelTranslations":{},"name":"commercial-mortgages","order":5,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How much of a deposit do I need for a Commercial mortgage?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"This will drastically vary between lenders and of course between cases with varying circumstances. Here at Aria Finance from the initial enquiry to completion, our average turnaround time for a commercial mortgage loan is 8 to 10 weeks.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1661937632340,"hs_deleted_at":0,"hs_id":83526020134,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662641608306,"products":[{"createdAt":null,"createdByUserId":0,"id":6,"isHubspotDefined":false,"label":"commercial-mortgages","labelTranslations":{},"name":"commercial-mortgages","order":5,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How long do applications take to complete for Commercial mortgages?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Using an established specialist finance distributor such as Aria Finance has multiple benefits including;
\n- \n
- We can help save borrowers and brokers time researching the many choices and help them find the loan better suited to their needs specifically. If specialist finance is a financial area you’re new to, this process could feel overwhelming and Aria finance is here to support you through that. \n
- Through Aria Finance, you will be accessing a wide range of lenders to ensure the client obtains the best possible terms. This research and product selection would be carried out on your behalf as part of the service we offer. \n
- With 20 years of experience in specialist lending, our large business volumes mean we are close to lenders and sometimes offered exclusive rates that other providers and intermediaries can’t access. These long-term relationships mean we have an understanding of the underwriting requirements for each lender and will be able to get deals accepted and offered quickly, an essential feature of bridging finance.
You also can choose to let us handle your client’s application from the initial enquiry stage through to completion. You can choose to be as hands-on or off in this process as you wish. \n
We can help with the products below:
\n
• Bridging Loans [Regulated, Unregulated or Semi Commercial & Commercial]
• Second Charge Mortgages [Residential or Buy-to-Let]
• Buy-to-Let Mortgages [Residential or Commercial]
• Commercial Mortgages [Commercial Buy-to-Let, Commercial Mortgage, Semi Commercial or Owner-occupied Commercial Mortgage]
• Development Finance
• First Charge Mortgages
","broker_specific":1,"hs_child_table_id":0,"hs_created_at":1662109020873,"hs_deleted_at":0,"hs_id":83763594360,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662643492041,"question":"2.\tWhat products can you help me with?"},{"answer":"The procedure to submit an enquiry with Aria Finance is flexible. There are various routes to contact us:
• Request a Quote
• Fill out an Enquiry form on the website
• Click and contact a member of the team on the Live Chat
• Email us at sales@ariafinance.co.uk
• Call the office and ask to speak to a member of the team – 02038399998
For unregulated loans we take a nominal application fee once we have sourced an appropriate option for your client and have secured a commitment from the lender to support the case (subject to full underwriting). Our broker fee is collected upon completion and successfully draw down of the loan.
","broker_specific":1,"hs_child_table_id":0,"hs_created_at":1662109319338,"hs_deleted_at":0,"hs_id":83758366979,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662643219123,"question":"4.\tWill my client have to pay upfront?"},{"answer":"Yes, of course, you can stay involved all the way through. We can package a case for you if you would like to give advice, or we can take full contact and give the advice to your client. With unregulated cases, we are happy to involve you throughout a case to find the right lending option for your client.
Alternatively, you’re welcome to pass us a name and a phone number and we’ll do the rest. We’ll keep you informed at the various milestones of each case and pass the client back to you at completion.
Let us know your preference in every case and we will strive to accommodate.
","broker_specific":1,"hs_child_table_id":0,"hs_created_at":1662109350984,"hs_deleted_at":0,"hs_id":83758366980,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662643262077,"question":"5.\tCan I stay involved?"},{"answer":"A regulated bridge is if you’re securing funds against what is or will become your main residence, or your family intend to occupy the property. Or if the loan is secured on a property that has been inherited or has previously been occupied by yourself or family members. Unregulated is if you're securing funds against any property which is not your residence and will not become in the future. In terms of length, regulated bridging loans are up to a maximum of 12 months term whereas unregulated bridging loans can go to 24 months in some cases. Also, it's worth noting that some bridging lenders themselves are unregulated and can't offer FCA-regulated bridging loans.
","broker_specific":1,"hs_child_table_id":0,"hs_created_at":1662109369266,"hs_deleted_at":0,"hs_id":83763594363,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1703070513776,"hs_updated_by_user_id":25791956,"question":"6.\tWhat’s the difference between Regulated vs Unregulated Bridging Loans?"},{"answer":"Yes, Second Charge Mortgages are regulated by the FCA, and practices adhere to the same rules as the First Charge market. They are no different from a First Charge mortgage except they rank second on the title deed of the property.","broker_specific":1,"hs_child_table_id":0,"hs_created_at":1662109392037,"hs_deleted_at":0,"hs_id":83758366981,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664532510312,"question":"7.\tAre Second Charge Mortgages regulated?"},{"answer":"Your client can borrow against residential, semi-commercial (such as a shop with residential units above it) and commercial properties - in any state, including half built or fire damaged. We can also arrange lending against land, with or without planning permission.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662126475431,"hs_deleted_at":0,"hs_id":83780318300,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126523443,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Which types of property can a bridging loan be used for?","sub_category":{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"Criteria","labelTranslations":{},"name":"Criteria","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"As bridging loans are for the short-term, each client must have a plan in place to pay off the loan. This is known as an ‘exit route’ or 'exit strategy'. A viable exit route is a must on all bridging loan applications. Typical strategies include sale of property or refinancing onto a longer term mortgage.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662126529753,"hs_deleted_at":0,"hs_id":83780318304,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126559203,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What is an exit route?","sub_category":{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"Criteria","labelTranslations":{},"name":"Criteria","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"A bridging loan can be taken out from one day up to 24 months.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662126560867,"hs_deleted_at":0,"hs_id":83783571328,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664538389261,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How long can a bridging loan be taken out for?","sub_category":{"createdAt":null,"createdByUserId":0,"id":3,"isHubspotDefined":false,"label":"Terms","labelTranslations":{},"name":"Terms","order":2,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"The minimum amount for a bridging loan is £26,000 and the maximum can be over £20m. The maximum is subject to LTV typically 75-80%. We work with lenders who will go to 100% LTV with additional security. At Aria Finance, we have vast experience in securing multi-million-pound loans.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662126589047,"hs_deleted_at":0,"hs_id":83780318305,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664538482952,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How much can my client borrow?","sub_category":{"createdAt":null,"createdByUserId":0,"id":3,"isHubspotDefined":false,"label":"Terms","labelTranslations":{},"name":"Terms","order":2,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Our experience means that in most cases we will be able to confirm almost straight away whether your client’s application is likely to be successful.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662126674389,"hs_deleted_at":0,"hs_id":83783984926,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126692354,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"When will my client find out if their application has been successful?","sub_category":{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"Applications Process","labelTranslations":{},"name":"Applications Process","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"From the initial enquiry through to completion, our average turnaround time is between two and three weeks.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662126694344,"hs_deleted_at":0,"hs_id":83783984927,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662126716252,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How long will an application take to complete?","sub_category":{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"Applications Process","labelTranslations":{},"name":"Applications Process","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Fees will vary on a case-by-case basis depending on the customers' circumstances and loan requirements. Aria Finance will provide a quotation for your enquiry which will detail the fees that will be payable.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662126717726,"hs_deleted_at":0,"hs_id":83783984930,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1664538669064,"products":[{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"bridging-loans","labelTranslations":{},"name":"bridging-loans","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Can my client repay their bridging loan early?","sub_category":{"createdAt":null,"createdByUserId":0,"id":3,"isHubspotDefined":false,"label":"Terms","labelTranslations":{},"name":"Terms","order":2,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"The following properties can be used against an Enterprise Finance second charge loan:
\n\n- \n
- A primary place of residence \n
- Buy-to-let properties \n
- Commercial properties \n
There are many reasons you might consider a second charge mortgage for your client.
\nThese commonly include:
\n\n- \n
- They want or need to consolidate other debts \n
- They require access to funds but have a bad credit rating \n
- They need to raise capital quickly (with Aria Finance, second charge loans are typically completed in around three to six weeks from the application) \n
- They want to avoid paying an early repayment charge on an existing mortgage \n
- The interest rate on their current mortgage is attractive and they do not want to lose it by remortgaging \n
- They require funding for home improvements \n
- They need to pay a tax bill \n
- They have to pay school fees \n
- They want to raise a deposit to buy an investment property \n
- Their business needs extra funding (something many mortgage lenders are not willing to consider remortgaging) - we can only do it for asset purchase, not for cash flow purposes \n
Aria Financecharge no upfront broker or admin fees. The costs are only payable by the client if the loan completes. Clients do have the option to pay some or all costs upfront or add these to the loan amount, subject to preference.
\nOur team of mortgage advisors is experienced in assessing loan applications and therefore will let you know whether a loan application is likely to succeed before an application is even processed. This way we are able to manage expectations and save you and your client time and money
\nWhen arranging a second charge mortgage on a BTL property, the client will pay for their own valuation.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662370162828,"hs_deleted_at":0,"hs_id":83978162577,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1708094742737,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Does my client pay any initial costs on a second charge mortgage?","sub_category":{"createdAt":null,"createdByUserId":0,"id":3,"isHubspotDefined":false,"label":"Terms","labelTranslations":{},"name":"Terms","order":2,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Our experience means that in most cases we will be able to confirm almost straightaway whether your client’s application is likely to be successful.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662370222272,"hs_deleted_at":0,"hs_id":83976840988,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1662370251456,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How long before I’m in a position to tell my client if we can proceed with their application?","sub_category":{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"Applications Process","labelTranslations":{},"name":"Applications Process","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"From the initial enquiry to completion, our average turnaround time for a second charge mortgage is 3-6 weeks.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1662370252902,"hs_deleted_at":0,"hs_id":83976840990,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1663852501875,"products":[{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"second-charge-mortgages","labelTranslations":{},"name":"second-charge-mortgages","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How long will an application take to complete?","sub_category":{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"Applications Process","labelTranslations":{},"name":"Applications Process","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"The repayment term can be anywhere from three to 30 years.
\n\n
Heavy refurbishment bridging/ development finance offers clients an opportunity to secure funds to assist with the purchase (or remortgage) of a property and typically covers 100% of the build costs.
\nDevelopers and other property investors often have their funds tied up in existing projects or property. A heavy refurb bridge or development product can be a great way to help them move onto their next project without having to wait for the existing ones to sell or pulling money out of those properties.
\nDuring a refurbishment project, cashflow for your client is likely to be limited. Most lenders will allow the interest to be rolled up into the loan, meaning that there's no monthly payments due on the loan, freeing up their cash whilst property undergoes work and isn't generating them any income.
\nLoans can be arranged and the pre-planning stage, or once planning is granted; then Aria Finance helps facilitate the funding process and enables your client to bring their desired projects to life.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1694511591229,"hs_created_by_user_id":25791956,"hs_deleted_at":0,"hs_id":134538432831,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1694512393963,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How can Heavy Refurbishment Finance benefit your clients?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Your client's track record (i.e., their history with previous projects); if they don't have experience themselves, then lenders will look to understand who the client's main contractor will be and what projects they've completed, to ensure that the development will run smoothly.
\nThe viability of the project, including:
\n- \n
- Location \n
- Market demand \n
- Total costs for the project including the purchase price, build costs, professional fees \n
- What the property will be worth on completion (GDV) \n
- The client's ability to repay the loan at the end of the term, whether it be via sale or refinance \n
Each lender has specific criteria which must be considered during the application process. At Aria Finance, we have a panel of lenders carefully selected to help clients with a variety of projects and with varying development experience.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1694512396075,"hs_created_by_user_id":25791956,"hs_deleted_at":0,"hs_id":134544646552,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1694512722545,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What factors are considered when evaluating your clients' applications for Heavy Refurbishment Finance?","sub_category":{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"Applications Process","labelTranslations":{},"name":"Applications Process","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Yes, we can arrange funding for all types of property projects, Whether it's a quick 'tart & turn' or a more complex refurbishment, conversion or ground-up development. We have solutions to meet your client's needs.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1694512727950,"hs_created_by_user_id":25791956,"hs_deleted_at":0,"hs_id":134544646559,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1694512881357,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Can my client get refunding for Ground Up Development projects?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Ground-up Development Finance offers developers an opportunity to secure funds to assist with the purchase (or remortgage) of property or land, and typically covers 100% of the build costs.
\nDevelopers often have their own funds tied up in existing projects, and development finance can be a greater way to help them move onto their next project without having to wait for the existing ones to sell.
\nFor newer clients coming into the industry, it also allows them the opportunity to have the cashflow to complete their project whilst also having the experience and guidance of the lenders to help seem them through the build.
\nLoans can be arranged at the pre-planning stage, or once planning is granted then; Aria helps facilitate the funding process and enables developers to bring their desired projects to life.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1694512937192,"hs_created_by_user_id":25791956,"hs_deleted_at":0,"hs_id":134544646563,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1694514752274,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"How can Ground-Up Development Finance benefit your developer clients?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Your client's track record (i.e., their history with previous projects); if they don't have experience themselves, then lenders will look to understand who the client's main contractor will be and what projects they've completed, to ensure that the development will run smoothly.
\nThe viability of the project, including:
\n- \n
- Location \n
- Market demand \n
- Total costs for the development including the purchase price, build costs, professional fees \n
- What the property will be worth on completion (GDV) \n
- The client's ability to repay the loan at the end of the term, whether it be via sale or refinance \n
Each lender has specific criteria which must be considered during the application process. At Aria Finance, we have a panel of lenders carefully selected to help clients with a variety of projects and with varying development experience.
","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1694514754366,"hs_created_by_user_id":25791956,"hs_deleted_at":0,"hs_id":134546045286,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1694515588715,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"What factors are considered when evaluating your clients' application for Ground-up Development Finance?","sub_category":{"createdAt":null,"createdByUserId":0,"id":4,"isHubspotDefined":false,"label":"Applications Process","labelTranslations":{},"name":"Applications Process","order":3,"type":"option","updatedAt":null,"updatedByUserId":0}},{"answer":"Yes, we can arrange funding for all types of property refurbishment projects. Whether it's a quick 'tart & turn', or a more complex refurbishment or conversion requiring planning permission and structural alternations. We have solutions to meet your client's needs.","broker_specific":0,"hs_child_table_id":0,"hs_created_at":1694515677944,"hs_created_by_user_id":25791956,"hs_deleted_at":0,"hs_id":134520612198,"hs_is_edited":false,"hs_published_at":1708095516058,"hs_updated_at":1694516071966,"hs_updated_by_user_id":25791956,"products":[{"createdAt":null,"createdByUserId":0,"id":2,"isHubspotDefined":false,"label":"development-finance","labelTranslations":{},"name":"development-finance","order":1,"type":"option","updatedAt":null,"updatedByUserId":0}],"question":"Can my client get funding for property refurbushment projects?","sub_category":{"createdAt":null,"createdByUserId":0,"id":1,"isHubspotDefined":false,"label":"The Basics","labelTranslations":{},"name":"The Basics","order":0,"type":"option","updatedAt":null,"updatedByUserId":0}}],"offset":0,"total":94,"totalCount":94}
Frequently asked questions
What is a Bridging Loan?
A bridging loan is a short-term interest-only loan available to those that need access to capital quickly. Traditionally used for a property purchase, it is a loan to ‘bridge’ the gap while other finance (such as a mortgage or sale of property) is secured by the borrower. Bridging can also be used for a remortgage of a customers existing security or can be secured by way of a second charge. Bridging finance is secured, meaning the borrower uses property (or land) as security to the lending institution.
A bridging loan is a short-term interest-only loan available to those that need access to capital quickly. Traditionally used for a property purchase, it is a loan to ‘bridge’ the gap while other...
Who can apply for a Bridging Loan?
Who might need a Bridging Loans?
Bridging loans are mainly used by clients who need quick, short-term capital to fund a property purchase. They include those who:
- Broken Property Chains - A bridging loan can be used to fix a broken property chain.
- Un-mortgageable - If a property is unmortgageable, such as a house without a kitchen or bathroom, borrowers can use a bridging loan to purchase it.
- Renovations / Conversions - A bridging loan is an option if a borrower's goal is to renovate a property with the aim of adding value to sell at a higher price.
- Lease Extensions - Purchasing a property that has less than 80 years left on the lease can be challenging, as the banks may decline the mortgage.
- Planning Permissions - If your client wanted to purchase land or property for the sole purpose of getting planning permission (or use change) and then re-selling, a bridging loan could finance that transaction. Land with planning permission granted commands a higher value, so they could sell on for a profit or alternatively develop it themselves, exiting on to a development finance facility.
- Auction Purchases - When purchasing a property at an auction your client will usually have to pay a deposit 10% of the full price on the day of the auction - and will have up to 28 days to pay the remaining funds. A bridging loan can be very helpful when they need access to money fast, so many people use bridging loans for this purpose and then repay the loan once they have the mortagge.
Bridging loans are mainly used by clients who need quick, short-term capital to fund a property purchase. They include those who:
- Broken Property Chains - A bridging loan can be used to fix a broken...
What is a Second Charge mortgage?
A second charge mortgage is a secured loan against a client's property, that gives them access to the equity they hold in it. As such, it is only available to property owners. It’s called a ‘Second Charge’ mortgage simply because the primary mortgage on a property is referred to as the ‘First Charge’ mortgage.
A second charge mortgage is a secured loan against a client's property, that gives them access to the equity they hold in it. As such, it is only available to property owners. It’s called a ‘Second...
What are the main benefits of a Second Charge mortgage?
Flexible: Maybe the borrower is self-employed and lending criteria have tightened since they took out their first mortgage. Or perhaps they’re credit-impaired, at the salary multiple limit.
Fast: Second Charge mortgages can complete quickly. This can be days or weeks. Typically, 3-6 weeks.
Functional: There are cases where a Second Charge might also be appropriate. For example, they can sometimes simply prove cheaper than remortgaging – particularly if your client faces heavy early repayment charges.
Flexible: Maybe the borrower is self-employed and lending criteria have tightened since they took out their first mortgage. Or perhaps they’re credit-impaired, at the salary multiple limit.
Fast: ...
Who can apply for a Second Charge mortgage?
Any property-owning individual can apply for a second charge mortgage with Aria Finance.
Any property-owning individual can apply for a second charge mortgage with Aria Finance.
What reasons might a client apply for a Second Charge mortgage?
- Home improvements
- Second property deposits
- Tax debt repayment
- Business finance
- School fees
- Home improvements
- Second property deposits
- Tax debt repayment
- Business finance
- School fees
How much can a client borrow for a Second Charge mortgage?
Where a second charge mortgage is used to buy property, the borrower can apply for:
- Up to 100% loan-to-value on residential properties
- Up to 75% loan-to-value for clients with credit problems
Where a second charge mortgage is used to buy property, the borrower can apply for:
- Up to 100% loan-to-value on residential properties
- Up to 75% loan-to-value for clients with credit problems
What is Development Finance?
- Property development finance is a type of short-term, secured finance that is used for many small, medium, and large-scale property projects, including renovations, office block conversions or to purchase and build on previously undeveloped land from the ground up.
- Development finance is used by many different types of people from private individuals to portfolio developers and small to large companies
- Unlike a traditional mortgage, development finance is a short to medium-term loan that is secured against the projected gross value rather than the current value of the land/property. It can be complicated so it is beneficial to use an experienced broker, like Aria Finance.
- Property development finance is a type of short-term, secured finance that is used for many small, medium, and large-scale property projects, including renovations, office block conversions or to...
Who can apply for Development Finance?
What does Development Finance cover?
How are Development Finance rates calculated?
Do Development Finance loans have to be taken all at once?
What is a Buy-to-Let mortgage?
Which types of property might need a Buy-to-Let mortgage?
Examples of non-standard properties might include:
- Serviced accommodation and student residences
- Houses in Multiple Occupation (HMO)
- Multi-unit properties with one title deed
- Freehold properties split into several flats
- Flats above shops, including fast food and takeaways
- Ex local authority flats
Examples of non-standard properties might include:
- Serviced accommodation and student residences
- Houses in Multiple Occupation (HMO)
- Multi-unit properties with one title deed
- Freehold properties...
Who might want to use a Buy-to-Let mortgage?
- Someone who has a good credit record
- Somebody who can afford to take the risk
- A home-owner who will find it easier to get a buy-to-let mortgage
- A property investor, specifically those interested in houses or flats
- Someone who has a relatively high salary
- A person under 70, although older applicants can be considered
- Someone who has a good credit record
- Somebody who can afford to take the risk
- A home-owner who will find it easier to get a buy-to-let mortgage
- A property investor, specifically those interested in...
Who can apply for a Buy-to-Let mortgage?
Buy-to-Let mortgages: how much can be borrowed?
- The amount that can be borrowed is based on the rental income achievable.
- Generally, the assessment of the affordability of the mortgage payment is based on the rental income the property generates versus the mortgage payment, with an added 45% to cover shortfalls.
- The service charges associated with the rental will also be taken into account when assessing affordability.
- The amount that can be borrowed is based on the rental income achievable.
- Generally, the assessment of the affordability of the mortgage payment is based on the rental income the property generates...
When will my client find out if their application has been successful?
Who can apply for a First Charge mortgage?
Borrowers looking for an alternative to High Street mortgages this includes but is not limited to:
- Expats
- Foreign nationals
- First-time buyers
- Self-employed (1-year with tax calculation and HMRC Tax Year Overview or accounts)
- Professional sportspeople
Borrowers looking for an alternative to High Street mortgages this includes but is not limited to:
- Expats
- Foreign nationals
- First-time buyers
- Self-employed (1-year with tax calculation and HMRC Tax...
How much can my client borrow?
Purchases or Remortgages?
What is a Commercial mortgage?
Who can apply for a Commercial mortgage?
Which types of property can a Commercial mortgage be used for?
Here are just a few examples of what constitutes a commercial property for commercial mortgage purposes:
- Shops (including those with flats above)
- Offices
- Warehouses
- Factories
- Workshops
- Garages
- Hotels
- Restaurants
- Pubs
Here are just a few examples of what constitutes a commercial property for commercial mortgage purposes:
- Shops (including those with flats above)
- Offices
- Warehouses
- Factories
- Workshops
- Garages
- ...
How do Residential mortgages at Aria Finance differ from High Street Bank mortgages?
There isn't a lot we can't lend on. Aria Finance has access to specialist lenders which offer broader criteria including:
- No upper age limits
- High LTV
- Broad property ranges considered, incl. Right to Buy properties, new build, Wattle and Daub, high-rise apartments, concrete properties, Cornish units, Mundic block construction and many more non-standard construction types.
- Applicants with adverse credit history considered
There isn't a lot we can't lend on. Aria Finance has access to specialist lenders which offer broader criteria including:
- No upper age limits
- High LTV
- Broad property ranges considered, incl. Right...
What are the benefits of bridging loans?
There are many benefits to bridging loans such as speedy application, quick transfer and broader lending criteria - to name a few. Let's look at these and others in more detail.
- Speedy Application Process
- Adaptive Lending Criteria
- Repayment Options
- Condition of security properties not a factor
There are many benefits to bridging loans such as speedy application, quick transfer and broader lending criteria - to name a few. Let's look at these and others in more detail.
- Speedy Application...
What are viable exit routes for Bridging Finance?
We tend to see three main exit routes for bridging finance.
1. Sale of property – The client may sell the property that the bridging finance has been secured against within the term of the loan to repay the bridging loan. This can also be the sale of an alternative property.
2. Refinance – This could be the refinancing of the bridging loan with a mortgage or in some case another bridging loan from a different lender (a lender cannot write back-to-back bridging loans on the same property). This would usually need to be evidenced by an agreement in principle.
3. Cash redemption – The client will need to evidence that a definite cash sum will be made available during the term of the loan, substantial enough to redeem the loan.
There are other exit routes that can be considered alongside these, as long as we are able to obtain evidence they will occur within the term and are deemed viable by the lender, consideration can be made.
We tend to see three main exit routes for bridging finance.
1. Sale of property – The client may sell the property that the bridging finance has been secured against within the term of the loan to...
What happens if the client doesn't exit the bridge within the agreed term?
Ideally, this shouldn’t happen as the exit route will be a major part of the underwriting of the case at outset.
The ability to repay the loan is a fundamental element to the loan being granted in the first instance, but circumstances can change during the loan – if they do and the exit cannot be achieved within the timescales, there are two options. The customer should give as much notice to the existing lender if they foresee any issues in redeeming their loan in time, and we can help to arrange another way of repaying the loan
1 – Going back to the existing lender to extend the term. This will incur a new set of fees in line with arranging the original loan.
2 – Rebridging to another lender – however, this will typically be more expensive because the client wasn’t able to exit the bridge within the original loan term and is therefore riskier. It's important to pay off the bridging loan before it expires to avoid paying expensive fees and penalties.
Ideally, this shouldn’t happen as the exit route will be a major part of the underwriting of the case at outset.
The ability to repay the loan is a fundamental element to the loan being granted in...
What does retained interest mean?
What’s the impact of retained interest on a Bridging Loan?
If the client is looking to achieve the maximum loan to value available, interest and fees can generally only be added up to 75% maximum.
If the exceeds this threshold once interest and fees are added, they will be deducted from the loan instead.
For example, your client wants to borrow £100,000 at 75% LTV and interest rates will be 1% per month.
With a 12-month term and after 2% fees, the net loan amount will be £86,000 As the monthly interest payments of £12,000 and the fees will have to be deducted from the gross loan to ensure the entire borrowing does not exceed 75% loan to value.
It is important to note that the client will only ever pay for what they use. If they elect to retain interest on the loan, but are able to repay the loan before the end of the term they will receive a refund of unused interest.
Again, using the scenario above, if the client where able to repay the bridging loan in month six, and did not require the full 12-months, they would receive a refund of six months' unused interest payment; £6,000 in this example.
What’s the difference between Regulated vs Unregulated Bridging Loans?
What interest rates can I expect with Bridging Loans?
How flexible are Bridging Loans?
How are Bridging Loans underwritten?
Unlike a standard, high street residential mortgage, bridging loans are underwritten with less focus on formal criteria, affordability and credit checks and more focus on the strength, viability and plausibility of the client’s exit strategy to pay off the loan and the quality of the asset offered as security - rather than the client’s ability to pay.
Of course, there will still be formal identification checks in order to prove identification of borrowers to lenders.
Unlike a standard, high street residential mortgage, bridging loans are underwritten with less focus on formal criteria, affordability and credit checks and more focus on the strength, viability and...
Why choose a Specialist Finance distributor instead of going direct to the lender?
Why are Second Charge mortgage interest rates higher than traditional (FIrst Charge) mortgages?
If your client defaults on their mortgage, the First Charge takes precedence over the Second Charge, which means that the Second Charge lender may not be left with enough residual equity from the repossession to repay their loan.
As a result of this increased risk, they recover the loan through higher monthly interest rates.
If your client defaults on their mortgage, the First Charge takes precedence over the Second Charge, which means that the Second Charge lender may not be left with enough residual equity from the...
How can I explain the costs of a Second Charge mortgage?
The flexible nature of Second Charge mortgages presents a higher risk to the lender, which is reflected in the interest rates. Also, the case has to be transacted by a specialist broker who will incur processing costs.
However, with our expert service, we will be able to ensure the product is the best available for your client.
The flexible nature of Second Charge mortgages presents a higher risk to the lender, which is reflected in the interest rates. Also, the case has to be transacted by a specialist broker who will...
Are Second Charge mortgages regulated?
Yes, Second Charge mortgages are regulated by the FCA and practices adhere to the same rules as the First Charge market.
They are no different from a First Charge mortgage except they rank second on the title deed of the property.
Yes, Second Charge mortgages are regulated by the FCA and practices adhere to the same rules as the First Charge market.
They are no different from a First Charge mortgage except they rank second on...
How flexible are Second Charges mortgages?
Second Charge mortgages are extremely flexible in their range of criteria, speed and uses, which has proven appeal to a wide range of borrowers. As an ideal way to raise funds from existing equity without disturbing their First Charge mortgage, Second Charges can be accessed by both individuals and landlords, are mostly without ERCs and offer loan sizes from 6 times income.
They are used for a variety of reasons such as debt consolidation, home improvements, tax debt clearance, property deposits, school fee payments and business financing – in fact, any legal purpose. By securing against a property, the borrower will gain the ability to consider longer-term borrowing that is not available through unsecured lending (which is typically restricted to a maximum of 7 years on a repayment basis).
An unsecured loan is typically capped at £25,000 – with a Second Charge mortgage, borrowers will have the ability to borrow more than this, typically up to £2 million (subject to the equity in their property).
Second Charge mortgages are extremely flexible in their range of criteria, speed and uses, which has proven appeal to a wide range of borrowers. As an ideal way to raise funds from existing equity...
Can I trust Second Charge mortgage lenders?
What types of projects can Development Finance be used for?
Who can access Development Finance?
How much money can be borrowed with Development Finance?
Three important factors will be assessed for an idea of loan size
- The current value of the site with planning or the value of the property before works.
- The build costs
- The gross development value (GDV) is the end value of a property once works have been completed
Typically, lenders will consider up to 65% of the gross development value and up to 100% of the build costs. Many lenders may not consider an application if the total build costs are more than 75% of the GDV. Loan terms are typically up to 18 months.
The size of the loan amount obtainable will also vary with lenders. Aria Finance have experience in funding projects which range anywhere from £150,000 to £25,000,000.
Three important factors will be assessed for an idea of loan size
- The current value of the site with planning or the value of the property before works.
- The build costs
- The gross development value...
How is Development Finance structured?
How is interest calculated on Development Finance?
Interest rates will be calculated by
- The amount borrowed
- The percentage borrowed against the overall costs – current value and build costs combined
- The loan term required Interest rates typically start at 5.5% and are often calculated annually.
Interest rates will be calculated by
- The amount borrowed
- The percentage borrowed against the overall costs – current value and build costs combined
- The loan term required Interest rates typically...
What fees can I expect with Development Finance?
These fees will vary across the market
- Broker fee – This varies between brokers. Some brokers do not charge a fee and rely on receiving commission from lenders when the loan completes. Other brokers may charge a fixed fee or a percentage of the total loan value.
- Application fee – Some lenders and brokers charge for submitting an application
- Valuation fee – To calculate an unbiased, accurate value of the security, lenders will typically instruct an independent valuation. This can also include a projected valuation of the project once completed
- Arrangement fee – Often calculated as a percentage of the total cost of the loan
- Monitoring fees – Development projects are monitored for progress and this typically involves a cost.
- Drawdown fees- A fee charged whenever a new instalment of funds is transferred to the borrower
- Legal fees – If needed, borrowers will have to pay for legal costs such as hiring a solicitor or qualified legal advice
- Exit fee – Often calculated as a percentage of the total cost of the loan
- Administration fees - Any additional costs charged by either lender or broker
These fees will vary across the market
- Broker fee – This varies between brokers. Some brokers do not charge a fee and rely on receiving commission from lenders when the loan completes. Other...
Is Development Finance regulated?
How does the application process work for Development Finance?
This is the typical process with a broker...
- Enquiry for capital raising raised by the client
- The broker then reviews mortgage options
- If development finance is considered most suitable, the broker will typically refer the case to a specialist finance distributor (SFD) who may have wider access to development finance lenders and more competitive rates o The broker will inform the client that they are being referred to an SFD. They should also discuss with their clients all costs, fees and charges, required documentation, the importance of transparency and the desired exit route.
- The SFD then reviews the key case details and...
- Assigns the case to an underwriter who assesses the initial suitability of the application
- Indicative terms are sent to the client, their broker and an agreement letter to proceed for the client to sign and return
- The client is then sent paperwork with a checklist of supporting documents to return to the specialist finance distributor
- A third-party surveyor instructed by the SFD visits the site to determine the project’s plausibility – and a valuer for the project’s total value
- The formal loan offer and final terms are then sent to the client. At this point, the client may involve their solicitor for legal support and advice on whether to proceed. The loan completes and the day one loan is drawn • This is followed by further drawdowns until the project is complete
This is the typical process with a broker...
- Enquiry for capital raising raised by the client
- The broker then reviews mortgage options
- If development finance is considered most suitable, the broker...
What are Development Finance exit routes?
What eligibility checks will there be for Buy-to-Let mortgages?
Different lenders will have their own eligibility checks. They will typically check the borrowers:
- Ability to pay the deposit and source of funds
- Income (2 year’s SA302) credit and assets
- Last 3 months’ personal and /or business bank statements as appropriate to verify rental income on remortgage cases
- Proof of ID (certified copy of passport or driving licence)
- Proof of residency (utility bill or bank statement)
- Lease copy (AST or commercial lease)
Different lenders will have their own eligibility checks. They will typically check the borrowers:
- Ability to pay the deposit and source of funds
- Income (2 year’s SA302) credit and assets
- Last 3...
Why are bridging loans considered to be expensive?
Expense should be considered in terms of how much the overall cost will be for your client. This can often be categorised in two ways;
1. Financial Benefit - Your client purchases an unmortgageable property for £100,000 at auction. With use of a bridging loan, they are able to complete renovation works of a new bathroom and kitchen, the property sells for £150,000. Once costs have been taking into account from the £50,000 return on the sale, it eliminates the perceived expensive nature of the bridging finance used. It is no longer expensive finance, but the only finance available to achieve this opportunity.
2. Emotional Benefit - A landlord client’s buy-to-let mortgage lender pulls out at the last minute, and they are already in their notice-to-complete period, having already exchanged. With the flexibility of a bridging loan, a case can complete in days – saving the landlords deposit and avoiding losing the investment property as they can still complete on the new purchase and then have a period of 24-months to arrange traditional finance on the property to replace the bridging loan.
The expense of bridging reflects the risk the lender is taking in the lending decision. They operate minimal underwriting and often secure against unmortgageable, unmarketable properties that finance could not be obtained for through traditional routes. Bridging generally carries no redemption penalties, so with some lenders, after the first month, the client is free to redeem the loan.
This all contributes to the higher interest rate the client will be charged above traditional finance.
Expense should be considered in terms of how much the overall cost will be for your client. This can often be categorised in two ways;1. Financial Benefit -Your client purchases an unmortgageable...
What sort of properties can be purchase or re-finance with Buy-to-Let mortgages?
Although this will vary between lenders, here are a range of properties that can often be financed with Buy-to-Let mortgages:
- Serviced accommodation and student residences
- Houses in Multiple Occupation (HMO)
- Freehold properties split into several flats
- Flats near to or above commercial premises such as shops, including fast food and takeaways
- Ex local authority flats
- Holiday let
- Airbnb
Although this will vary between lenders, here are a range of properties that can often be financed with Buy-to-Let mortgages:
- Serviced accommodation and student residences
- Houses in Multiple...
How long can Buy-to-Let mortgages be borrowed for?
How much of a deposit is needed for a Buy-to-Let mortgage?
How long do applications take to complete for Buy-to-Let mortgages?
How does the application process work for Buy-to-Let mortgages?
- The client gets in touch with their broker seeking options to raise funds for a Buy-to-Let property.
- Having conducted a fact-find process, the broker assesses whether a High Street Buy-to-Let mortgage will meet their needs or if they will need to refer the client’s case to a specialist lender, via a Specialist Finance Distributor (SFD)
- If the broker decides to refer their client to a SFD, they will let their client know they are being referred and expect a call from them directly.
- The SFD underwriter then calls the client and assesses if the client’s circumstances will be suitable for a BTL mortgage. If they are, the underwriter then prepares indicative terms which they send to the client to review.
- If the client confirms they are pleased to go ahead with the full process, they are sent all relevant paperwork and a list of underwriting requirements; they can then complete the required paperwork, pay any upfront fees required, gather the required documentation and send it back to the SFD.
- The underwriter pre-underwrites the deal, ensuring it’s complete for the lender. They then send the application to the lender to get formal approval in principle
- The lender issues the Agreement in Principle (AIP) to the client through the SFD and requests any further supporting documents.
- Once the client returns the required documents to the SFD, the underwriter will re-evaluate the case and instruct a valuation.
- Once the valuation is received, the SFD packages the case and submits it to the lender.
- The lender does a final underwrite of the loan and approves it. They then issue a formal offer, with additional documentation to sign including; the offer itself, legal charge permission and proof of buildings insurance.
- The client signs and returns the final documents to the SFD who forwards them over to the lender who instructs the solicitors when received.
- Once all legalities have been finalised the funds are released to the borrower
- The client gets in touch with their broker seeking options to raise funds for a Buy-to-Let property.
- Having conducted a fact-find process, the broker assesses whether a High Street Buy-to-Let...
What fees and charges can I expect with Buy-to-Let mortgages?
These fees will vary across the market:
- Broker fee – This varies between brokers. Some brokers do not charge a fee and rely on receiving commission from lenders when the loan completes. Other brokers may charge a fixed fee or a percentage of the total loan value.
- Application fee – Some lenders and brokers charge for submitting an application
- Valuation fee – To calculate an unbiased, accurate value of the security, lenders will typically instruct an independent valuation. This can also include a projected valuation of the project once completed.
- Arrangement fee – Often calculated as a percentage of the total cost of the loan
- Legal fees – If needed, borrowers will have to pay for legal costs such as hiring a solicitor or qualified legal advice
- Exit fee – Often calculated as a percentage of the total cost of the loan. There are some commercial mortgages that do not have exit charges.
- Administration fees - Any additional costs charged by either lender or broker
These fees will vary across the market:
- Broker fee – This varies between brokers. Some brokers do not charge a fee and rely on receiving commission from lenders when the loan completes. Other...
What eligibility checks will there be for Commercial mortgages?
Different lenders will have their own eligibility checks. They will typically check the borrowers:
- Cash flow
- Outstanding debts
- Projected business income
- Ability to pay the deposit and source of funds
- Income (full accounts of trading business) credit and assets
- 2 year's trading accounts
- Last 3 months’ business bank statements
- Proof of ID (certified copy of passport or driving licence)
- Proof of residency (utility bill or bank statement)
Different lenders will have their own eligibility checks. They will typically check the borrowers:
- Cash flow
- Outstanding debts
- Projected business income
- Ability to pay the deposit and source of...
What sort of properties can be purchased or refinanced with Commercial mortgages?
Although this will vary between lenders, here are a range of properties which commercial mortgages may suit:
- Shops
- Offices
- Factories
- Warehouses
- Restaurants
- Pubs
- B&Bs
- Working farms
- Mixed usage properties
Although this will vary between lenders, here are a range of properties which commercial mortgages may suit:
- Shops
- Offices
- Factories
- Warehouses
- Restaurants
- Pubs
- B&Bs
- Working farms
- Mixed usage...
How much money can be borrowed with Commercial mortgages?
Minimum loan sizes typically start at £20,000 and can range anywhere into and beyond £25 million (subject to criteria). This range will vary between lenders.
Typical repayment terms are up to 25 years.
Minimum loan sizes typically start at £20,000 and can range anywhere into and beyond £25 million (subject to criteria). This range will vary between lenders.
Typical repayment terms are up to 25...
How much of a deposit do I need for a Commercial mortgage?
How long do applications take to complete for Commercial mortgages?
1. Why choose a Specialist Finance distributor instead of going direct to the lender?
Using an established specialist finance distributor such as Aria Finance has multiple benefits including;
- We can help save borrowers and brokers time researching the many choices and help them find the loan better suited to their needs specifically. If specialist finance is a financial area you’re new to, this process could feel overwhelming and Aria finance is here to support you through that.
- Through Aria Finance, you will be accessing a wide range of lenders to ensure the client obtains the best possible terms. This research and product selection would be carried out on your behalf as part of the service we offer.
- With 20 years of experience in specialist lending, our large business volumes mean we are close to lenders and sometimes offered exclusive rates that other providers and intermediaries can’t access. These long-term relationships mean we have an understanding of the underwriting requirements for each lender and will be able to get deals accepted and offered quickly, an essential feature of bridging finance.
You also can choose to let us handle your client’s application from the initial enquiry stage through to completion. You can choose to be as hands-on or off in this process as you wish.
Using an established specialist finance distributor such as Aria Finance has multiple benefits including;
- We can help save borrowers and brokers time researching the many choices and help them find...
2. What products can you help me with?
We can help with the products below:
• Bridging Loans [Regulated, Unregulated or Semi Commercial & Commercial]
• Second Charge Mortgages [Residential or Buy-to-Let]
• Buy-to-Let Mortgages [Residential or Commercial]
• Commercial Mortgages [Commercial Buy-to-Let, Commercial Mortgage, Semi Commercial or Owner-occupied Commercial Mortgage]
• Development Finance
• First Charge Mortgages
We can help with the products below:
• Bridging Loans [Regulated, Unregulated or Semi Commercial & Commercial]• Second Charge Mortgages [Residential or Buy-to-Let]• Buy-to-Let Mortgages [Residential...
How can I submit an enquiry?
The procedure to submit an enquiry with Aria Finance is flexible. There are various routes to contact us:
• Request a Quote
• Fill out an Enquiry form on the website
• Click and contact a member of the team on the Live Chat
• Email us at sales@ariafinance.co.uk
• Call the office and ask to speak to a member of the team – 02038399998
The procedure to submit an enquiry with Aria Finance is flexible. There are various routes to contact us:• Request a Quote• Fill out an Enquiry form on the website• Click and contact a member of the...
4. Will my client have to pay upfront?
For unregulated loans we take a nominal application fee once we have sourced an appropriate option for your client and have secured a commitment from the lender to support the case (subject to full underwriting). Our broker fee is collected upon completion and successfully draw down of the loan.
For unregulated loans we take a nominal application fee once we have sourced an appropriate option for your client and have secured a commitment from the lender to support the case (subject to full...
5. Can I stay involved?
Yes, of course, you can stay involved all the way through. We can package a case for you if you would like to give advice, or we can take full contact and give the advice to your client. With unregulated cases, we are happy to involve you throughout a case to find the right lending option for your client.
Alternatively, you’re welcome to pass us a name and a phone number and we’ll do the rest. We’ll keep you informed at the various milestones of each case and pass the client back to you at completion.
Let us know your preference in every case and we will strive to accommodate.
Yes, of course, you can stay involved all the way through. We can package a case for you if you would like to give advice, or we can take full contact and give the advice to your client. With...
6. What’s the difference between Regulated vs Unregulated Bridging Loans?
A regulated bridge is if you’re securing funds against what is or will become your main residence, or your family intend to occupy the property. Or if the loan is secured on a property that has been inherited or has previously been occupied by yourself or family members. Unregulated is if you're securing funds against any property which is not your residence and will not become in the future. In terms of length, regulated bridging loans are up to a maximum of 12 months term whereas unregulated bridging loans can go to 24 months in some cases. Also, it's worth noting that some bridging lenders themselves are unregulated and can't offer FCA-regulated bridging loans.
A regulated bridge is if you’re securing funds against what is or will become your main residence, or your family intend to occupy the property. Or if the loan is secured on a property that has been...
7. Are Second Charge Mortgages regulated?
Which types of property can a bridging loan be used for?
What is an exit route?
How long can a bridging loan be taken out for?
How much can my client borrow?
When will my client find out if their application has been successful?
How long will an application take to complete?
Can my client repay their bridging loan early?
Fees will vary on a case-by-case basis depending on the customers' circumstances and loan requirements. Aria Finance will provide a quotation for your enquiry which will detail the fees that will be payable.
Fees will vary on a case-by-case basis depending on the customers' circumstances and loan requirements. Aria Finance will provide a quotation for your enquiry which will detail the fees that will be...
Which type of property can a second charge mortgage be secured against?
The following properties can be used against an Enterprise Finance second charge loan:
- A primary place of residence
- Buy-to-let properties
- Commercial properties
The following properties can be used against an Enterprise Finance second charge loan:
- A primary place of residence
- Buy-to-let properties
- Commercial properties
For what reasons might a client apply for second charge mortgage?
There are many reasons you might consider a second charge mortgage for your client.
These commonly include:
- They want or need to consolidate other debts
- They require access to funds but have a bad credit rating
- They need to raise capital quickly (with Aria Finance, second charge loans are typically completed in around three to six weeks from the application)
- They want to avoid paying an early repayment charge on an existing mortgage
- The interest rate on their current mortgage is attractive and they do not want to lose it by remortgaging
- They require funding for home improvements
- They need to pay a tax bill
- They have to pay school fees
- They want to raise a deposit to buy an investment property
- Their business needs extra funding (something many mortgage lenders are not willing to consider remortgaging) - we can only do it for asset purchase, not for cash flow purposes
There are many reasons you might consider a second charge mortgage for your client.
These commonly include:
- They want or need to consolidate other debts
- They require access to funds but have a bad...
Does my client pay any initial costs on a second charge mortgage?
Aria Financecharge no upfront broker or admin fees. The costs are only payable by the client if the loan completes. Clients do have the option to pay some or all costs upfront or add these to the loan amount, subject to preference.
Our team of mortgage advisors is experienced in assessing loan applications and therefore will let you know whether a loan application is likely to succeed before an application is even processed. This way we are able to manage expectations and save you and your client time and money
When arranging a second charge mortgage on a BTL property, the client will pay for their own valuation.
Aria Financecharge no upfront broker or admin fees. The costs are only payable by the client if the loan completes. Clients do have the option to pay some or all costs upfront or add these to the...
How long before I’m in a position to tell my client if we can proceed with their application?
How long will an application take to complete?
What is the repayment term on a second charge mortgage?
The repayment term can be anywhere from three to 30 years.
The repayment term can be anywhere from three to 30 years.
Are second charge mortgages interest-only or repayment-based?
What is the minimum that can be borrowed using a commercial mortgage?
What is the typical repayment term?
Who holds the title deeds with a commercial mortgage?
How long will an application take to complete?
How can Heavy Refurbishment Finance benefit your clients?
Heavy refurbishment bridging/ development finance offers clients an opportunity to secure funds to assist with the purchase (or remortgage) of a property and typically covers 100% of the build costs.
Developers and other property investors often have their funds tied up in existing projects or property. A heavy refurb bridge or development product can be a great way to help them move onto their next project without having to wait for the existing ones to sell or pulling money out of those properties.
During a refurbishment project, cashflow for your client is likely to be limited. Most lenders will allow the interest to be rolled up into the loan, meaning that there's no monthly payments due on the loan, freeing up their cash whilst property undergoes work and isn't generating them any income.
Loans can be arranged and the pre-planning stage, or once planning is granted; then Aria Finance helps facilitate the funding process and enables your client to bring their desired projects to life.
Heavy refurbishment bridging/ development finance offers clients an opportunity to secure funds to assist with the purchase (or remortgage) of a property and typically covers 100% of the build costs.
What factors are considered when evaluating your clients' applications for Heavy Refurbishment Finance?
Your client's track record (i.e., their history with previous projects); if they don't have experience themselves, then lenders will look to understand who the client's main contractor will be and what projects they've completed, to ensure that the development will run smoothly.
The viability of the project, including:
- Location
- Market demand
- Total costs for the project including the purchase price, build costs, professional fees
- What the property will be worth on completion (GDV)
- The client's ability to repay the loan at the end of the term, whether it be via sale or refinance
Each lender has specific criteria which must be considered during the application process. At Aria Finance, we have a panel of lenders carefully selected to help clients with a variety of projects and with varying development experience.
Your client's track record (i.e., their history with previous projects); if they don't have experience themselves, then lenders will look to understand who the client's main contractor will be and...
Can my client get refunding for Ground Up Development projects?
How can Ground-Up Development Finance benefit your developer clients?
Ground-up Development Finance offers developers an opportunity to secure funds to assist with the purchase (or remortgage) of property or land, and typically covers 100% of the build costs.
Developers often have their own funds tied up in existing projects, and development finance can be a greater way to help them move onto their next project without having to wait for the existing ones to sell.
For newer clients coming into the industry, it also allows them the opportunity to have the cashflow to complete their project whilst also having the experience and guidance of the lenders to help seem them through the build.
Loans can be arranged at the pre-planning stage, or once planning is granted then; Aria helps facilitate the funding process and enables developers to bring their desired projects to life.
Ground-up Development Finance offers developers an opportunity to secure funds to assist with the purchase (or remortgage) of property or land, and typically covers 100% of the build costs.
...
What factors are considered when evaluating your clients' application for Ground-up Development Finance?
Your client's track record (i.e., their history with previous projects); if they don't have experience themselves, then lenders will look to understand who the client's main contractor will be and what projects they've completed, to ensure that the development will run smoothly.
The viability of the project, including:
- Location
- Market demand
- Total costs for the development including the purchase price, build costs, professional fees
- What the property will be worth on completion (GDV)
- The client's ability to repay the loan at the end of the term, whether it be via sale or refinance
Each lender has specific criteria which must be considered during the application process. At Aria Finance, we have a panel of lenders carefully selected to help clients with a variety of projects and with varying development experience.
Your client's track record (i.e., their history with previous projects); if they don't have experience themselves, then lenders will look to understand who the client's main contractor will be and...
Can my client get funding for property refurbushment projects?
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Case studies
Bridging loans
Case Study: Simultaneous Bridging Finance and Buy-to-Let Mortgage for Portfolio Landlord
Loan type: Bridging Loan / Buy-to-Let Mortgage | Amount: £401,724 / £2,037,793 | LTV: 33% / 64% |...
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Commercial mortgages
Case Study: Delivering a bespoke solution of £12.4m for a property development firm
Loan type: Commercial Mortgage | Amount: £12.4m | LTV: 70% | Term: 10 years
Read story >>