A very good point for you when contracting an open bridging loan is that you have a good credit history. Just as with any other type of loans, lenders take into consideration your credit past in these cases as well. The better and the cleaner your credit record, the bigger the chances of you receiving an open bridging loan on good terms are.

For example, the cost of a bridging loan may be 1%-2% of the property’s value, and these are the simplest values. You may find lenders charging even more, which is not quite as beneficial to you as a borrower. So, if you are eligible for say 80% of a property evaluated at £100,000, then you receive £80,000 financing through the loan. Now, if your credit record is clean, you have a good history, and then the cost of your loan might be set at 1%, which means you’ll have to pay £800 for the costs. This is the best scenario, where you have good credit rating, and there is not involved an exaggeratedly huge amount of money. In case you have to show a bad credit history, with the same values you might be paying for the costs £1,600. Plus don’t forget to take into account all the other extra fees like administrative fees, notary fees, and many others, which could sum up even £1,000.

All in all, as you have noticed, an open bridging loan is not very cheap, and that is why it is very important that you are well determined in your actions, and know what you are doing, otherwise it is not worth contracting loans with such high fees.

If you contract an open bridging loan, it doesn’t mean that you have time at your discretion. You have to make preparations from before, like trying to find potential clients; because you don’t want to be faced with an open bridging loan’s deadline one of a sudden. You have to know that an open bridging loan is a bit more costly than the closed bridging loan, exactly because of the risk it involves for the lender.

Remember that:

• An open bridging loan’s overall cost is more expensive than that of a closed bridging loan.


• Unless you can foresee the ability for the property to be sold in time, this type of financing is not for you


• If there is not required for the exchange of contracts to have taken place, it doesn’t mean you have all the time at your discretion


• You should always compare offers, and stick to the one which comes on the most reasonable terms.