Our client’s bridging loan on a London development had gone into default, and the lender was moving to repossess. We arranged a £1.2 million rebridge in 2 weeks that repaid the old lender, stopped the repossession and funded the rest of the work.
At a glance
| Loan type | Refinance bridging loan (a “re-bridge”) |
|---|---|
| Purpose | Repay a bridging loan in default and fund the rest of the development |
| Loan size | £1,200,000 |
| Area | London |
| Term | 12 months |
| Exit | Some units refinanced onto buy-to-let mortgages, the rest sold |
| Time to complete | 2 weeks |
The client
Our client was a property developer partway through a development. Their existing bridging loan had gone into default, and the lender was moving to repossess the property.
The challenge
Every week in default added default interest and fees, eating into the client’s equity. The works weren’t finished, so the property couldn’t yet be sold or moved onto a long-term mortgage.
Many lenders won’t look at a borrower who is already in default. The client needed a lender who would judge the deal on the property and the plan, not just on the missed deadline.
What we did
We looked at what the development would be worth once finished, not only what it was worth half-built. We set out for lenders what work was left, what it would cost, and how each unit would be refinanced or sold.
We found a lender who agreed to repay the existing loan in full and provide the funds to finish the development.
The outcome
The old lender was repaid and the repossession stopped. The client finished the development, refinanced some of the units onto buy-to-let mortgages and sold the rest. The bridging loan was repaid in full.
Questions people ask
Can I get a new bridging loan if my current one is in default?
Often, yes, if there is enough equity in the property and a believable plan to repay. The sooner you get advice, the more options there usually are, because default interest reduces your equity every month.
What is a re-bridge?
A new bridging loan that repays an existing one. It’s used when the original term runs out before the sale or refinance is ready, or when a project needs more time or money to finish.
How McDowell can help
We’re a Northern Ireland based broker with over 30 years’ experience, arranging bridging finance across the UK. If your bridging loan is overdue or in default, talk to us as early as you can. Find out more about bridging loans, or book a free call below.
Our case studies are anonymised. We leave out anything that could identify a client, their property or their business. Every case is different, and lenders decide each application on its own merits.
Some bridging loans are not regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured on it.
McDowell Financial Services Ltd is authorised and regulated by the Financial Conduct Authority, FRN 800988.
This article is general information only and isn't personal advice. Mortgage and protection products depend on your circumstances, so please speak to one of our advisers before making a decision.
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