Two into one won’t go

THE QUESTION

If we were purchasing a property for cash would it be possible to purchase using two bridging providers to provide 100% of the purchase price?

The first one would have the first charge and the second would provide bridging on a second charge basis (such as Precise) and both forwarded amounts would be combined to form a 100% cash purchase.

The intension here isn't to deceive either provider and to be up front from the outset with both providers - just interested in other opinions as to whether it's doable.

THE ANSWER

No bridger is going to lend you 100% of the value of a property even if they have a first charge over it.  They will never put themselves in a position where, if they had to sell the property quickly, they would be unable to recoup all of their investment.

If no bridger will lend 100% of value on a first charge, there is zero chance of any bridger being daft enough to top up to 100% of value on a riskier second charge.

However, if the question alters to can you borrow 100% of the purchase price; the answer is it’s possible, given the right circumstances.

1. Put up as additional security a property that you already own. It helps if it has no mortgage on it, but it could still possibly work up to a 50% mortgage on it.
2. Buy significantly below true current value and use a bridger that lends on actual value, rather than purchase price. It would need to be circa 40% below market value. They still might ask you to put down a token deposit though.
3. Structure a delayed completion deal where you exchange, refurb then complete and use a bridger that lends on the post refurb value.

I have brokered each of the above a number of times – so I know it’s possible.

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