Where Can Second Charge Bridging Loans Still Be Obtained?

Bridging Loans are niche products not generally known to most people, second charge bridging loans are even less know to members of the general public. What are Second Charge Bridging Loans and are they still available? We shall discuss this in this article.

Second Charge Bridging Loans are similar to First Charge Bridging Loans in that the loan is secured on property or land. Residential property or commercial property can be used as security.  The maximum loan amount tends to be around 70% of the Open Market Value (OMV) less the amount of all other loans secured on the property. This includes all mortgages and secured loans. If the equity remaining is less than £25,000 then this would be below the minimum loan that most lenders would lend. There are some niche lenders who will lend below low £25,000 but the costs of the loan are high in relation to the loan amount.

Unfortunately, if there is a large first charge loan secured against the property and the loan amount is around the £25,000 mark then this makes the loan too risky for a lot of lenders.  This is because in the event of a default the charges incurred by the large amount of the first charge will rapidly eat into the remaining equity above the 70% of the total loan amount. In fact, as the first charge lender will be paid off first this could leave the second charge lender receiving less than their loan amount.

To sum up, Second Charge Bridging Loans are still available but they are not as easily available as some may think. If you have a high value house, say above £500,000, with a large first charge the chances are that you will be disappointed even though you consider that you have plenty of equity in your property.

Fortunately if you require a Second Charge Bridging Loan we can help place your application from our panel of Second Charge Bridging Loan lenders.

Tags: bridging, charge, Loans, obtainable, second

This entry was posted on Tuesday, August 10th, 2010 at 10:14 pm and is filed under Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.