Why lenders are cautious
To a new lender, a re-bridge means the first plan did not work. They will want to understand why, and to be confident the new plan will. The balance to be repaid is often higher than the original loan, because interest has rolled up and the existing lender may be charging default interest or extension fees.
For these reasons, lenders that consider re-bridges often lend at a lower loan to value, sometimes around 70% rather than 75%, or charge a higher rate. Some exclude re-bridges altogether, and some only consider them with a sale as the new exit.
Acting before the term ends
The best time to arrange a re-bridge is before the existing loan expires. Once a bridge is in default, the existing lender can charge higher interest and may start recovery action, and some new lenders are less willing to step in. Starting early, with a clear explanation and an updated plan, keeps more options open.
Ask your existing lender whether it will extend the term first. An extension can be cheaper than a re-bridge, although it may come with a fee and a higher rate. We compare the cost of an extension with refinancing to a new lender.
What a strong re-bridge case includes
Lenders will usually want:
- A redemption statement from the existing lender showing the full amount to repay
- A clear explanation of the delay, such as a failed sale, a planning issue or contractor problems
- Evidence of the new exit: a sale agreed, an agent's report, a refinance agreement in principle or completed works
- An up-to-date valuation, which the new lender will usually instruct
- Your credit history, including how the existing loan has been run
Being open about problems helps. Lenders find out about defaults and arrears anyway, and an honest explanation is better received.
Arranging a re-bridge
We compare lenders that consider re-bridges on loan to value, rate and the exits they accept, then approach those that fit with a clear case. Instant Quotes gives indicative figures as a starting point, and final terms depend on each lender's valuation and checks.
If the borrower is an individual or the trustees of a trust, and the property is, or will be, lived in by you or a close family member, the loan is a regulated mortgage contract with additional protections. We will tell you at the outset if that applies and how your case will be handled. Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
