Birmingham — security property
When a property investor in Harborne, Birmingham needed to release equity to fund a buy-to-let purchase, a mainstream lender declined the application because of two historic CCJs and mortgage arrears. AF Credit assessed the overall transaction — strong security, low gross LTV, clear exit — and completed in 18 days.
Birmingham — security property
| Item | Detail |
|---|---|
| Net loan | £145,000 |
| Property value | £290,000 |
| Net LTV | 50% |
| Gross LTV (inc. retained interest & fees) | 56.3% |
| Monthly rate | 0.89% |
| Term | 12 months |
| Security | Residential property, Harborne, Birmingham |
| Adverse credit | Two satisfied CCJs + historic mortgage arrears |
| Exit strategy | BTL refinance (CCJs approaching 4-year threshold) |
| Completion time | 18 days |
The borrower owned a residential property in Harborne outright — no mortgage secured against it. They wanted to release equity to purchase a buy-to-let investment before another buyer secured the deal.
The mortgage application was declined because the credit file showed two satisfied County Court Judgments and historic mortgage arrears. Every debt had been repaid in full, but the mainstream lender's automated credit policy triggered a decline regardless of the security position or the strength of the underlying transaction.
Time was also becoming a problem. The investment property had already attracted interest from other buyers, and a standard mortgage timeline — even if one could be found — was unlikely to complete fast enough.
Rather than focusing only on the credit file, we assessed the whole transaction.
Because the security was strong and the exit strategy was realistic, AF Credit lent directly against the Birmingham property on a 12-month first charge bridging loan.
The loan completed in 18 days from the initial enquiry. The borrower released £145,000 of equity, completed the buy-to-let purchase before losing it, and moved forward with a clear plan to refinance onto a BTL mortgage once the bridge term — and the four-year CCJ window — had elapsed.
TimelineMany borrowers assume that a bridging loan works the same way as a mortgage. In reality, the assessment is different.
AF Credit focuses on the strength of the overall transaction: the amount of equity available, the quality of the security property, whether the adverse credit has been resolved, and how credible the exit strategy is.
In this case, the borrower was only borrowing 50% of the property's value on a net basis (56.3% gross, including retained interest and fees). All outstanding debts had been cleared. The planned BTL refinance exit was realistic precisely because the CCJs would be over four years old by the end of the bridge — outside the standard look-back period used by most mainstream BTL mortgage lenders.
That combination — conservative gross LTV, satisfied adverse credit, realistic exit — made the transaction acceptable despite the historic credit issues.
FAQsYes — in many cases. Satisfied CCJs, historic defaults and previous mortgage arrears do not automatically prevent a bridging loan. The outcome depends on how recent the adverse credit is, whether it has been satisfied, the available equity, the property value and the exit strategy. Every application is assessed individually.
Yes. Bridging lenders assess applications differently from mortgage lenders. A mainstream mortgage decline does not mean a bridging loan will also be declined. AF Credit focuses on the security, the LTV and the credibility of the exit rather than automated credit scoring.
Net LTV is the net loan as a percentage of the property value. Gross LTV includes the net loan plus retained interest and arrangement fees. In this case, the net loan was £145,000 (50% of £290,000) but the gross facility — including 12 months' retained interest and the 2% arrangement fee — was approximately £163,392, giving a gross LTV of 56.3%. Lenders assess gross LTV because it represents total exposure against the security.
There is no universal rule, but most lenders are more comfortable with CCJs that are at least 2–3 years old and fully satisfied. In this case both CCJs were 3–4 years old. The exit strategy was specifically designed around the four-year threshold — by the end of the bridge, the CCJs would fall outside the standard look-back window used by most BTL mortgage lenders.
Historic, resolved mortgage arrears are considered as part of the overall picture and do not automatically result in a decline. The key questions are whether the arrears have been cleared, how long ago they occurred, and whether the rest of the transaction — security, LTV, exit — is strong enough to support the loan.
AF Credit assesses bad credit bridging applications on the overall strength of the transaction — security, LTV and exit — not just the credit file. Same-day indicative terms.
Get same-day termsDisclaimer: Case study details have been anonymised to protect client confidentiality. All lending is subject to underwriting and credit approval is not guaranteed. Any property used as security may be repossessed if you do not repay your loan within the agreed term. AF Credit acts solely as a lender and does not provide financial advice.