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A bridging loan that is unregulated will not be regulated by the FCA and is used as security against property that is not your own home or a home a close relative lives in.
This type of bridging loans is secured against property that is either owned by a business or is a residential property than is being let out to non-family members.
If the payments are missed, the owner will not lose their own home, but the property they own which they are letting out could be repossessed, causing any tenants to be left homeless, or any business that the bridging loan may have been taken out in will be taken to court or could even be made bankrupt.
These ‘unregulated’ bridging loans can also be first charge or second charge and work in the same way that the regulated bridging loans do. As long as there is enough equity, a first or second charge can be secured on the property.
These types of bridging loans can be secured on properties such as houses, flats, and plots of land that are going to be used to rent out to the public, and who are not your immediate family.