northern ireland bridging loans
The short term lending market is probably at its most buoyant. There is a proliferation of bridging lenders and it seems that a new one appears almost every week with even bigger pockets.
Loan to values (LTVs) are still on an upward trajectory, interest rates are going the other way and lenders have an even greater appetite for bridging, commercial mortgages and development finance deals.
Northern Ireland Bridging & Development Finance
So the picture is a rosy one on the UK mainland, what about the 6 counties?
Generally the picture is the same. The only real difference is that lenders tend to be a little thin on the ground in the province and as our funds are extremely limited, we do have to lean on these specialised lenders.
So where will they lend?
As long as it’s in a large conurbation then it should be ok. Apart from the obvious one in Belfast, they will lend in cities and towns such as Lisburn, Derry, Bangor, Newtownabbey, Craigavon, etc.
The important thing to note when lending in Northern Ireland (and one that all lenders will focus on) is that there MUST be demand for the project/property/security in question.
Valuations will be sought that back up the application and stated values but apart from that and the fact that every deal will be limited to the LOWER of the purchase price or valuation, everything else in terms of lending criteria remains the same as it does on the UK mainland.
The Legal Process
It is (contrary to popular opinion) a quite different legal process to that of the UK mainland or Scotland and not as straightforward as some industry commentators would have you believe.
It is a different conveyancing process and this means that the legal process will take slightly longer for lenders to navigate around.
That said, it’s not unfeasible to expect a bridging or development loan to complete and pay out in less than 4 weeks which is the same as the rest of the UK.
How to apply for a Northern Ireland Bridging Loan
Just visit our application page and complete the short form and one of our team will be in touch within 24 hours to start the process of searching for a mortgage or loan.
Currently, we can only deal with direct borrowers, not brokers.
We provide commercial mortgages to the people of Northern Ireland.
Unlike a bridging loan which is usually for borrowing of less than 18 months (and in most cases 12 months), a commercial mortgage is taken over a much longer period of time, in some cases up to 30 years.
Quite often, a number of different lending products are used to make a deal or project work.
For example, a developer could borrow money against a piece of land with a short term bridging loan. They could then utilise property development finance to build on that same piece of land and finally, when the project is finished, they could apply for a long term commercial mortgage to repay the existing bridging loans and development finance.
As you can see, commercial mortgages are longer term options and usually come attached with a much cheaper interest rate. The reason for this is that all of the ‘risk’ in the deal has been taken out by the bridging and development loans.
By the time a bank comes along with their cheap, long term commercial mortgage, the project has been purchased, developed and finished.
Commercial mortgage rates and fees in Northern Ireland
Whilst a bridging loan can be as much as 1.5% a month and in some cases, much higher than that, a commercial mortgage can start from as little as 3.5% a year.
Even on slightly riskier projects where traditional bank funding won’t come into play, there are a number of alternative finance providers who will lend in Northern Ireland with rates from 7.5% a year.
It is important that a distinction is made between bridging loans and commercial mortgages because the rates and interest charged differ massively as you will see below.
The other thing to note with commercial lending is that the fees charged by the lenders tend to be a lot less than they would with a bridging loan. We know of one instance where a borrower in Belfast was charged an arrangement fee of 6% and another example where a borrower in Lurgan was charged an exit fee of 3% of the GDV – not the loan!
If you have a project that you would like funded, why not apply today?