March 18, 2021

Case Study - Bridging Loan in just 7 working days for an auction purchase

Loan Type:

Bridging Loans

Loan Value:

240,000

LTV:

50%

Loan Rate:

0.49%

Loan Term:

12 months

When purchasing a property at auction, there are several risks.

One of those risks is not being able to fund the purchase in full before the deadline.

Once the hammer falls, you are legally required to pay a 10% deposit, which you can then lose if you are unable to continue with the purchase.

This could be because a mortgage has been declined, or you are waiting for the sale of another property to complete.

This case study demonstrates how bridging finance can save a potential loss of a deposit when obstacles occur and can bridge the gap between the winning bid and completion.

The Client 

 

The client was a property owner, looking to sell their current home and buy a new property to move into.

The situation

 

On the 5th of February, our client put in a winning bid for a property that was up for sale through an auction. The property was £525k, and they paid the deposit required on the day of the sale.

They still needed the rest of the balance to be paid within 28 days, and the sale of their current property for £625k was still going through but would not complete in time to meet the auction deadline.

They still needed to raise £240k, with the rest of the balance being funded by family.

Our solution

Our client was up against the clock, they were not going to meet the auction deadline and were under intense pressure to pay off the remaining balance for the property they had bid for at auction.

We acted extremely quickly and found a lender who we knew would be able to keep up with our pace and who would be happy to proceed with the bridging loan.

With all bridging loans, you need a strong exit strategy, and the client was able to use the mortgage they had been approved for as their exit. There was no valuation needed as we were able to get the mortgage agreed upon using a desktop valuation. This sped the process up considerably.

Benefit

 

By coming to Enterprise our clients benefited from a wealth of knowledge that comes from our expert brokers, but also a range of lenders on panel that can act fast.

When a client needs a bridging loan, it is usually because there is a need for speed. We work fast to get our clients the fund they need, when they need it.

Result

The client first contacted us on the 25th of February needing our help, and they were able to complete the purchase of their new property on the 8th of March – only 7 working days.

This took the pressure off and eased the client’s financial stress, whilst the sale of their existing property continued, allowing them to celebrate the purchase of their new home without worry.


For a quick chat, a meeting to discuss opportunities, or a more complicated deal on your desk – drop us a line or give us a call today on 020 8731 5333.