Obtaining a bridging loan is a relatively simple process. However, it is important to be informed and get all the information before deciding what bridging loan to get.
Bridging loans are designed to be made available quickly, but it is important not to get swept up in the process.
Finding The Right Bridging Loan For You
Initial Stages
If you are thinking of getting a bridging loan, you should initially establish what you require from the bridging loan, how much and for long are a good start.
You should put together the essential information about your contemporary circumstances. Then you can start comparing the available bridging loans on the market. There are lots of resources that allow you to do this online.
Bridging Loan Lender?
Next, you should determine if you want to speak to a bridging loan broker or not. This article will later outline the benefits of speaking to a bridging loan broker.
Alternatively, applications can be made online. It is important to remember that bridging loans are not available on the high street, and you must look to alternative lenders.
Choose A Bridging Loan
You should then choose what bridge loan you want to try to obtain. You must wait to decide until after you have read all the information about it and know all fees involved.
You will be given a decision in principle; you can then use that to negotiate property deals or in critical points of purchase. Once the application is processed with the lenders, they will contact valuer or solicitors if necessary.
Once you have approval, you need to wait for the bridge loan lender to give you the money. Nevertheless, this can potentially take a fortnight.
What Information Do Bridging Loan Lenders Need
Property as collateral is usually a requirement from bridging loan lenders. Loans can be made secure on the value of a single property or a combination of multiple or other personal wealth, including vehicles.
An agreement will be made that the lender can repossess the property if you do not pay the amount back in time.
Bridging loans are often used to help developers improve a property, but the bridging loan lenders will need to know the property’s condition. Lenders will also need to know your age as applicants must be over 18.
If you are looking for a closed bridging loan, the bridging loan lender will want to know your exit strategy.
Those looking to borrow might need to present proof of income, but this is not always required.
Remaining Vigilant of Fees
When you look at possible bridging loans, it is important to remember that as with their nature bridging loans can be expensive and involve monthly charges.
Many forget that lower interest rates often come at the expense of large exit fees. Borrowers should investigate what costs are involved before committing to a contract.
The fees involved in bridging loans often include:
• Interest Rates• Arrangement Fees
• Valuation Fees
• Administration Fees
• Redemption Fees
Using A Broker For Bridging Loans
Bridging Loan Brokers can be very helpful when you get a bridging loan. A broker can assist you with putting your application together appropriately and help you obtain the top deals available because they work with a variety of lenders.
Here are the advantages of having a bridging loan broker to help:
Lower Prices
A brilliant bridging loan broker will defend you to arrange the best price for you and potentially get you lower lender fees and help you improve your application.
Brokers are impartial and will be an ally in any negotiation.
Help You Understand The Market
The bridging loan market is constantly changing, so who the best lender is changing too.
Every lender is different and will favour certain factors, including where the borrower is in the UK and the exit strategy.
Even the way lenders look at applications is different. Frequently, lending companies are influenced by who funds them, so the process is not as flexible as you might think.
Less Stress And Having Someone On Your Side
Arranging a bridging loan can be very stressful and is not compatible with a busy lifestyle. You do not want to be barraged with requests for information over a couple of weeks.
Taking advice from a neutral bridging loan broker helps you understand how the application is coming along and answer any of your queries.
A bridging loan broker will deal with the process for you, and having one will help you maintain control in the process as the broker will fight your corner.
Get to know more about bridging loans by clicking here.
Property Finance Partners is an experienced expert in property finance with years of supporting property investors, developers, builders and individuals looking for finance. Contact Property Finance Partners on 020 3393 9277 or email: [email protected]
