Common reasons to refinance with a bridge
- Funding a deposit on another investment or an auction purchase.
- Replacing an expiring loan, including a development loan approaching default interest.
- Releasing equity after a refurbishment, while you wait for the property to qualify for a mortgage.
- Business cash flow, secured against investment or commercial property.
- Buying out a partner or settling a dispute quickly.
First charge or second charge?
If the property has no mortgage, or you're replacing the existing lender, the bridge takes a first charge, up to around 70% LTV. If you want to keep an existing mortgage in place, a second charge sits behind it, typically up to around 55% LTV including both loans. The existing lender may need to consent to a second charge.
Borrowing against more than one property
Lenders can take security over several properties at once. That can raise more capital, or bring a purchase within LTV limits by adding equity from another property. Each additional property adds some legal cost, typically around £750.
Revolving credit for frequent buyers
If you buy several properties a year, a revolving credit facility can be secured on your existing portfolio and drawn down for each purchase, with funds released in as little as 48 hours. Facilities run from £250,000 to £2.5m in England and Wales.
Frequently asked questions
Can I raise money against my own home?
Not through Capitara. A loan secured on a home you or family live in is regulated by the FCA and must be arranged by an FCA-authorised adviser.
How is the property valued on a refinance?
On simple residential cases an automated valuation can be used for lower LTVs. Larger or more complex cases need a desktop or full valuation.
Do I have to say what the money is for?
Yes. Lenders ask the purpose of the funds and how you'll repay. Business purposes include buying property, refurbishment and working capital.