One Day Bridging Loans
Also referred to as "Daylight Bridging", these loans are used for back to back deals where two transactions (i.e. purchase and re-sale) for the same property complete on the same day.
A one day bridging loan is a "closed bridge" with the original lender being repaid on the day of lending. Interest costs are low with maybe a small administration fee and of course any legal costs. The maximum loan is in the range 80% - 85% of open market value.
There are essentially two types of transaction associated with a "daylight bridge".
The first is where a client purchases a property and immediately resells on the same day for a higher price to make a quick profit! Typically for this kind of deal the buyer would have an "option" to buy at one price from the original vendor and a contracted purchase from the eventual owner.
The second and much more popular option is where a buy-to-let investor buys a property at auction or maybe from a distressed seller at below market value. A bridging lender will lend to make any mortgage effectively a re-mortgage allowing the buyer a near no money down deal or even capital raising. Many investors have profited from this technique.
Update: with the current credit crisis these "standard" immediate re-mortgage Buy to Let deals are no longer available at this moment in time. However there are other legal finance techniques still available. Although these options work today, there is no guarantee they will work next week!.
If you have a "back to back" property transaction why not give us a call, we may still be able to help!