Bridging loan used to repay current lender in order to split titles

Bridging loans can prove to be a useful facility when you want to split a title but your current lender won’t allow it.

Client required funds to build 4 new houses on a plot that was part of a commercial property that he owned. They had successfully obtained planning permission for 4 new houses. The title now needed to be split so that 4 new additional titles could be created. His current commercial mortgage provider was very unhelpful as they would not agree to splitting the title, and also objected to the development taking place.

A bridging loan was used to repay the current lender and also provide the funds required to build the 4 new properties. Once completed the new houses would be sold or possibly refinanced in order to repay the bridging loan. The client also had the option to take out another commercial mortgage with a different lender on the commercial property, although the proceeds from selling just 3 of the properties would be enough to clear all borrowings.