What is the Difference Between a First and Second Charge Bridge Loan?
When a borrower grants a charge over property to a lender as security, it means that if the borrower defaults the lender can force the sale of the property to obtain repayment of the Bridge Loan.
The terms first and second charge refer to the level of priorities among Bridging Loan lenders. A second charge Bridge Loan is subordinate to a first charge Bridge Loan: if there is a default and the secured property is sold, a first charge Bridging Loan lender will receive its money first and the second charge Bridging Loan lender will only begin to recoup payment after all liabilities to the first charge lender have been made. Thus, from a lender’s perspective, a second charge is more risky and will attract higher interest rates to reflect the extra risk compared to a first charge.
There is a common misconception that if payments are maintained on a first charge loan then it doesn’t matter if payments on a second charge loan are missed. Borrowers should note that a bridging lender with a second charge has the same rights of repossession as any first charge lender. However, in the event of repossession, the second charge holder would have to make sure that the first charge lender’s charge was paid off first before paying off their own.
Bridge Loan Application - Leave your Contact Details, and we will Call you
On receipt of your details, you will receive a call from one of our knowledgeable, and friendly staff. We know each potential Bridge Loan has a story, we would like to hear it. It should be painless and quick, with a DIP following within minutes!
Thanks for the application! We aim to be back to you within the hour, unless outside working hours, in which case on our return
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1 Hour to your Decision in Principle once you Connect
A decision in Principle can be given within an hour of application, if during weekday hours. We can take a Bridge Loan from Decision in Principle to cash in your bank inside 4 days if necessary.
How to Apply for a Bridge Loan
Decision in Principle
The first step in obtaining a Bridge Loan is to enter your basic details; your name, type of bridge loan you want, property providing the security etc. On receipt Vitvo will issue a Decision in Principle within an hour, if the application is made within working hours.
If you wish to proceed with the Bridge Loan based on Vitvo's terms; the second step in obtaining a Bridge Loan is to enter your remaining details of the loan in an application form. Parts of it will already be pre-filled from the original details you gave us at the Decision in Principle Stage. On receipt, Vitvo will turn this around in 1 working day.
Valuation and Legals
All being well, Vitvo will confirm that we can proceed with the Bridge Loan. The third step in obtaining a Bridge Loan, is for Vitvo to arrange for a valuation, typically around £1,000. Simulataneously, Vitvo will work with your solicitor to document the agreed terms in a Bridge Loan agreement. Once this is agreed, and signed by both parties, your Bridge Loan is binding. This can take 3 days if each party is engaged.
Once the Bridge Loan has been signed, our solicitor will transfer the money to your solicitor within 3 hours.
This information is strictly for the use of approved intermediaries only Vita Solvo Ltd registered in England and Wales with company number 08251204 having its registered office at Flat A Melcombe Regis Court, 59 Weymouth Street, London, W1G 8NS