The charges, fees and overall borrowing varies from lender to lender. In the main, you should expect to be charged by lenders:
Arrangement fee – 1-2% of the gross or net loan amount.
Interest rate on a bridging loan – starts from 0.49% to over 1% per month. Application of interest can be retained, serviced, or rolled up. In some situations, the borrower may service the loan to reduce interest payments and increase day 1 LTV.
Exit fee – most bridging lenders do not charge an exit fee.
Valuation fee – fees start from £500 plus VAT. The borrower pays this direct to the valuer on acceptance of the loan offer. The amount will vary depending on the complexity of the assets being valued. They will assess the market value and GDV if a refurbishment or development element resulting in an uplift in end value.
Project monitoring fee – for extensive refurbishments where detailed assessment of build costs are required and project monitoring to certify construction drawdowns.
Application fees – usually around £295 to £499 applied by most lenders for processing the loan application.
Legal fees – The borrower is responsible for the bank’s solicitor fees to carry out legal due diligence and registering security. Most lenders have a fee scale starting at £900.00 plus VAT.
Telegraphic Transfer fee (TT Fee) – a small fee charged by the lender for the electronic transfer of funds to the borrowers nominated bank account.