A bridging loan broker can be invaluable when it comes to securing short term property finance.
Like most types of finance such as mortgages and personal loans you can research and apply for a bridging loan yourself, without using a bridging loan broker. If this seems appealing to you then our Introduction to Bridging Loans or How does bridging finance work? might be a good place to start.
However, when an investor or developer needs a bridging loan, they normally need it quickly. By using a specialist broker you can save time and a lot of hassle, leaving you able to get on with other more important tasks.
Here’s a few reasons how using a bridging loan broker can benefit you.
saving you time
By using a broker for your bridging finance you are immediately saving the time you would have spent on this yourself.
Most bridging loans are needed fast so you need to choose an experienced broker who can meet your deadlines.
Knowledgeable bridging finance brokers will know who to approach once they have asked you just a few short questions. Then it’s time for them to approach the bridging lenders and see who will lend to you and at what cost. In doing this they will also consider the urgency of the funds you need, as it’s no good applying for a low rate deal if the lender cannot send the funds when they are needed.
SAVING YOU MONEY
Brokers are there to find you the best deal, at the cheapest cost. Now the cost of a bridging loan is made up of a few different aspects: primarily arrangement fees, interest rate and exit fees.
In addition you are likely to have to pay a fee to the broker as well. This can cause borrowers to look elsewhere, or possibly look to go direct to save on the fees.
This can be counter-productive and firstly you are now doing the work yourself! And secondly brokers will have access to far more lenders than you, enabling them to reach the best lenders and the best rates that much quicker.
If you need cash quickly to secure a deal and lock in some profit then using a specialist broker to finance the project will save you money.
WHOLE OF MARKET CHOICE
The marketplace is vast with bridging lenders frequently changing rates and products. Some of these will accept direct business from borrowers but there are lots of specialist niche bridging finance companies that only work with brokers.
By using the best bridging loan broker you will be increasing the lending options available to you by a large margin. Most lenders are happy to lend right across the UK so if your project is in London, Manchester, Bristol or anywhere else we should be able to help.
Our brokers can help individuals, partnerships, limited companies, SPV’s and trusts.
By choosing to use a bridging loan broker you will gain their experience and knowledge but also they will be on your side when making approaches to lenders. They want to give you the best bridging loan advice and get you the best deal so you get you your money. So they will package and present your lending proposition as well as they can to gain a lenders approval in the shortest possible time.
OUR SERVICES INCLUDE
- Residential finance
- Commercial property finance
- Property auction finance
- Bridge to let mortgages
- Loans available from £50,000
- No age restrictions
- Interest roll-up
- First, second and third charge loans
- Bad credit options
- Regulated and unregulated loans
- Lending to individuals, companies and sole traders
- Term from 30 days
- Market leading rates
- Quick access to funds
What are bridging loans?
The ‘bridging’ in bridging loans can often cause some confusion.
Think of a bridging loan as a short term mortgage which is secured against either a residential or commercial property. By short term we generally mean 36 months or less. Bridging loans are available as a first charge, second charge and occasionally third charge.
Interest payments can be made monthly or you can allow the interest to roll-up and pay it all at the end.
Bridging finance lenders primarily look at the property to determine how much they can lend and also your exit strategy. This is how you will pay them back!
Funds are available quite fast. If you get all of your ducks in a row this could happen within just a few days.
A bridging loan will be regulated if the loan is secured against a property which the borrower currently occupies or intends to occupy.
A regulated bridging loan can be either a 1st charge loan or a 2nd charge loan. The loans are overseen by the Financial Conduct Authority (FCA) and fall within the same regulations as a residential mortgage. This provides consumers with protection from mis-selling.
Bridging loans can be used for:
- Breaking a property chain – Allow yourself to purchase your new home regardless of the property chain status
- Property auctions – A common use as purchases made at auction need to complete very quickly
- Short lease purchases – When standard mortgage lenders won’t lend
- Development finance – Fast money lent over the short term for property developments, conversions etc
- Buy to let properties – For speed and convenience of purchase. Normally a buy to let mortgage will be used as the exit.
- Buying a plot of land – Land mortgages can be used to buy plots of land including woodland and agricultural.
- Unmortgageable properties – There are many reasons why a high street lender rejects a property but bridging can help.
- Buying BMV using Below Market Value Finance
Bridging Loan FAQs
How long can I have a bridging loan for?
Bridging loans are a form of short term finance. Typically the loan duration offered goes from 3 months to 36 months.
What properties are acceptable?
Bridging loans are extremely flexible and they can be used to borrow against almost any residential, buy to let or commercial property.
How long does it take to arrange?
It is possible for a bridging loan to be completed in a week. But a more achievable timeframe would be 3-4 weeks.
What about if I have bad credit?
Most bad credit problems won’t affect a bridging loan application as the lender is most interested in the property.
What can a bridging loan be used for?
A bridging loan can be taken out for almost any purpose. The most common reasons are as a property chainbreaker, to purchase a property at auction and to help with short term cashflow issues.
What is a buy to sell mortgage for?
If you are looking to buy a property to refurbish and sell when finished, then a buy to sell mortgage could provide the finance you need. It is a short term mortgage that is suitable for property investors and developers who want to ‘fix and flip’.
Can I borrow 100%?
It is not generally possible to obtain finance of any type for 100% loan to value. However, 100% bridging loans are achievable if you have additional properties that can be used as security.