Second charge bridging: raising capital on a high-value home without disturbing an existing mortgage
What was the situation?
Our client approached LDN Finance to repay a loan that a friend had extended to him some time earlier, secured as a second charge against his main residence. The obligation needed to be cleared in full, with the second charge removed from the property.
The main residence was a substantial Sevenoaks home valued at £2,100,000, with an existing mortgage of £800,000 on a highly competitive rate. Our client first came to us while between employment, a factor that materially shaped the lending options available.
What was the issue?
The existing mortgage was held on a highly competitive rate and needed to remain in place. A further advance was not a viable route, given his income position between roles. A full remortgage would have released the capital, but at the cost of disrupting an arrangement that was working well.
The case therefore called for a facility that would sit alongside the existing mortgage rather than replace it, structured around a second charge transaction arranged to repay a personal loan. With only a reduced pool of potential lenders able to assist, specialist lender selection and precise positioning were central.
What was the process?
Romit Patel, Associate Director – Specialist Finance, approached the case as a structuring challenge rather than a straight capital raise. The brief went beyond securing the capital alone. Equally important was preserving what was already working in the client’s wider financial position.
A second charge bridging facility was identified as the appropriate structure, supported by a clearly defined exit via the onward sale of the main residence and substantial equity behind the facility.
Romit drew on long-standing relationships with a trusted network of specialist lenders, engaging directly with senior underwriters to position the case on its underlying merits. Direct access at this level allowed the structure, the exit and the client’s wider position to be understood in full context, and the case to be assessed accordingly. A facility of £360,000 was secured on highly competitive terms over a 12-month term.
With urgency to complete, Romit submitted the application and arranged for the valuation to proceed over the Christmas period, keeping the transaction moving through a time when some deals pause. The valuation came back in line with expectations and the facility completed within the required timeframe.
What was the solution?
A 12-month second charge bridging facility of £360,000 was arranged at 55% LTV against the main residence. The existing mortgage continued uninterrupted on it’s competitive rate, and the loan from the client’s friend was repaid in full on completion. The personal obligation was cleared, the second charge was removed from the property, and our client regained full control over his wider position.
The 12-month term gave control over the timing of the planned onward sale, allowing the property to be brought to market on the clients own terms rather than against a repayment deadline.
Precision structuring of this nature is central to LDN Finance’s Specialist Finance offering: cases that cannot be placed with mainstream lenders, structured with care around a client’s wider position, and delivered with the rigour and pace that define LDN Finance’s work. Where others see constraints, we structure solutions.
For specialist advice on bridging finance, visit https://ldnfinance.co.uk/specialist-finance/bridging-loan/
Need help securing bridging finance? Our experts are on hand to assist. Call 020 3903 9875 to speak to an adviser, or use our online contact form.
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