As you will have seen from the first article, The Basics: Regulated Bridging Loans versus Unregulated Bridging Loans, in this series which you can see here, a regulated bridging loan is a type of bridging finance that is regulated by the Financial Conduct Authority.
By implication, an unregulated bridging finance loan is therefore not regulated by the Financial Conduct Authority.
If life wasn’t complicated enough – what are the differences between the two?
Determining if you need an unregulated or regulated bridging loan will depend on the type of property you wish to purchase.
A regulated bridging loan is borrowing that:
If you are looking to raise a first or second charge against a property that is the residence of the owner, then you will need a regulated bridging loan. A minimum of 40% of the property will need to be (either now or in the near future) lived in by the homeowner or their family.
An unregulated bridging loan is borrowing that:
If you are looking to purchase or refinance a secondary property, commercial asset or a buy-to-let investment, then you can use an unregulated bridging loan. These short-term loans can be for expanding property portfolios or investing in long-term capital gains.
The Good News
If you need a regulated bridging loan, Penn Financial, authorised and regulated by the Financial Conduct Authority, can help. If you require an unregulated bridging loan then Penn Services (not regulated by the Financial Conduct Authority) can help you.
Whether you seek a regulated loan or an unregulated loan, Penn Group of Companies can help you achieve your goals all under the Group umbrella.
Always remember that when it comes to repayment, using your home as security for a bridging loan will put your home at risk and it may be repossessed if you are unable to keep up with payments on that loan.
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The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.