If you’ve been looking at taking out short-term property finance, it’s very important that you understand the costs involved in bridging loan. If you’ve been looking for bridging loan fees explained UK, you’ll find all the information you need to know right here with a bridging loan calculator.
Understanding the most common charges means knowing exactly what to expect before you agree to anything. Bridging loans give you fast and flexible funding and they’re often used for property purchases, renovations and resolving temporary cash flow problems. However, they can come with fees which can add up substantially, especially if you don’t seek out the best terms and rates for you. A broker can help you get the best deal for your situation.
Common Bridging Loan Fees Explained UK
Arrangement fees are also called facility fees and admin fees. These tend to be around 1 or 2% of the total loan amount. You’ll be charged these for the setting up of the loan. Interest on bridging loans tends to be charged monthly. The rate you pay will depend on things like the lender’s specific terms, the property type and your financial profile.
Your interest payments might be rolled-up, which means they are added to the loan and paid at the end, or they might be serviced. This means you’ll pay them monthly during the term. If the interest is ‘retained’, you’ll have to pay it in advance. Learn more about how bridging loan interest works
Valuation Fees
Before the loan is approved, the property you’re interested in may need to be valued professionally. The valuation fee you pay can depend on the value of the property and where it is located. Your valuation fee could be anything from a few hundred to more than a thousand pounds.
Legal Fees
You will also incur legal costs, and you may need to pay the lender’s too. These fees can vary but come as standard with bridging finance.
Exit Fees
You don’t always have to pay exit fees, but some lenders do charge them when loans are repaid. An exit fee can be a fixed amount or a percentage of the loan. Check whether you’ll be charged an exit fee before you commit.
Broker Fees
You may also need to pay additional charges if you use a Bridge Loan Direct finance solutions. A quality broker will work this into your loan structure and give you clarity on these costs from the start.
Why Choose Bridge Loan Direct
Making sense of these fees can be difficult, especially if you’ve never taken out bridging finance before. This is why so many people turn to us when they need access to a bridge loan. We specialise in transparent lending and getting you the best rates and terms possible. We have a panel of more than 300 lenders, which means we can help you find the best deal for your unique needs.
