There are now specialist lenders who provide a residential non-status loan against all types of land or property. These lenders can provide a decision very quickly, usually based on the valuation of a property, with funds released within a matter of days.
A non-status bridging loan allows a client to borrow money against the value of a property on a completely non-status basis. Unlike mainstream lending, non-status bridging lenders generally look at minimum lending terms of between 2 and 12 months. However, some lenders are even more flexible and do not impose a minimum period.
Two main features of non-status bridging finance are the speed of completion and the large sums available. Typically a short-term property loan is arranged and ready for draw-down within a working week (subject to a recent valuation being available).
Non-status bridging loans can be arranged for all types of commercial and residential property, including:
- Property development
- Property Auction Purchases
- Land (with or without planning permission)
- Refurbishments and conversion projects.
- Refinancing existing investments
- Manufacturing and industrial properties are also acceptable, although the loan-to-values may be restricted.
During the purchase of property, land or a business, many things can go wrong. Non-status bridging finance can step in when this happens. Because this type of finance is based entirely on the value of the security, there is no time wasted in arranging the facility.
Arranging a residential non-status bridging loan
A non-status bridging loan can provide a solution in cases of a temporary cash shortfall or in crisis. This usually occurs when a purchaser “pulls” out of a transaction at the last minute or when the client needs to complete a purchase before selling a different property.
Another benefit of non-status bridging finance is that monthly interest payments are not usually required to be paid during the loan period. Interest payments and arrangement fees are often deducted from the initial advance, which can help to ease the financial pressure.
A non-status bridging loan is a short-term loan secured on a property by either a first or second charge. This can be provided in the form of either commercial or residential property. A non-status bridging loan can be secured on purchasing a new property, an existing property, or a combination of both.
What Does Non-Status Mean?
Status refers to the amount of financial information an applicant can produce to support their application.
Non-Status does not necessarily mean that the applicant has credit problems; there are plenty of instances where an individual cannot supply financial information on a timely basis.
In the case of property development projects, a non-status loan can be used to help fund a purchase pending a planning application; once planning consent has been granted, the developer then switches to a mainstream development loan.
As the name would imply, non-status bridging loans are often used by people who have experienced financial difficulties, such as CCJs and even bankruptcy. However, lenders will still exercise caution and may apply restrictions to a loan arrangement. The normal underwriting rules will apply if the property is used as the borrower’s primary residence.