AREA: Esher, Surrey
AMOUNT RAISED: £650,000
PRODUCT USED: Bridging Loan
Client Scenario
Our clients, a couple going through a divorce, approached us with a complex financial situation. They had received their Decree Absolute but were facing challenges while waiting for their family home to sell.
Key Points:
- Family home valued at £1.6 million
- Husband still residing in the family home
- Wife renting a flat temporarily
- Desire to purchase a buy-to-let property for income generation
- Need for minor renovations on the family home before sale
The clients faced several hurdles:
- Their wealth was largely tied up in their primary residence
- They lacked liquid funds for the buy-to-let purchase and home improvements
- The wife was incurring additional costs through temporary rental accommodation
- They wanted to maximise the sale value of their family home
Funding Solution
Our experienced finance brokers identified a bridging loan as the most suitable option for our clients.
Here’s how they structured the solution:
- Loan Amount: Bridging loan of £650,000
- Security: The loan was secured against their family home
- Loan-to-Value (LTV): Approximately 40.6% (£650,000 / £1,600,000)
- Term: 12-month bridging loan to allow ample time for property sale
- Purpose of Funds:
- £400,000 for a buy-to-let property purchase
- £150,000 for family home renovations
- £100,000 for associated costs and living expenses
Final Outcome
By arranging this bridging loan, we helped our clients achieve several goals:
- Property Investment: They purchased a buy-to-let property, creating a new income stream
- Improved Sale Prospects: The renovations increased the family home’s value
- Financial Flexibility: The wife’s rental costs were offset by the new rental income
- Smoother Transition: The couple could live separately, easing the emotional strain of divorce
Why This Worked
- Speed: Bridging loans can be arranged much faster than traditional mortgages, often within 2-3 weeks
- Flexibility: The loan terms were tailored to the clients’ specific situation
- Exit Strategy: The sale of the family home provided a clear repayment plan
- Asset Utilisation: The clients could put their wealth to work instead of having it tied up in their primary residence
- Reasonable LTV: The low LTV of 40.6% made the loan attractive to lenders, ensuring competitive rates
Our expert brokers specialise in finding innovative financial solutions for complex situations.
This case demonstrates how bridging finance can be a valuable tool in divorce proceedings, allowing for property transactions and wealth redistribution even before the sale of shared assets.
Let’s talk bridging loans!
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