The demand for bridging loans from property investors has been steadily rising in recent years. As regulations governing the actions of traditional lenders have become increasingly stringent, investors and developers have turned to bridging finance to keep their projects moving and their property portfolios expanding.
Bridging finance accounted for 20% of all lending in Q3 of 2019, an increase of 2% in Q2. Refurbishment is one of the most popular uses of this type of finance, but bridging loans are highly flexible and can be used to fund a variety of projects, when standard loans are unavailable, including purchasing a property.
Bridging loans are also growing in popularity amongst homeowners who want to improve their property or to buy a new house without waiting for theirs to sell. Whether you’re a property professional or a homeowner, a bridging loan broker can help the process run smoothly and quickly.
If you’re new to bridging finance, choosing between providers and identifying, the best deal can be overwhelming and confusing, even for the savviest property investor. The number of lenders has increased in recent years, which is great for consumer choice but also makes the process more challenging for a novice to handle alone.
A bridging loan broker will have the experience, knowledge, and — perhaps most importantly — the contacts to secure the right deal for your purposes. They can liaise with lenders and negotiate the most favorable terms on your behalf.
Brokers spend years building industry contacts and developing effective working relationships with them. Borrowers can take advantage of a broker’s contacts by engaging their services as an intermediary.
One of the primary benefits of bridging finance is the potential speed at which funds are released to the borrower. However, moving a loan application through to completion so quickly involves a considerable amount of work and attention. The lender may need to follow up regarding missing documents or information.
A broker can keep on top of the progress of your loan, make sure it is moving as per your timescale and manage any issues that are flagged. Using a broker allows the borrower to focus on their work without interruption, safe in the knowledge a professional is overseeing their loan application.
Additionally, the bridging loan landscape can change rapidly. Interest rates fluctuate, and the best deal for you may differ almost from day-to-day. A broker will have the market knowledge and the time to act quickly on opportunities as they arise.
While a broker does work for commission or “procurement fees” — whereby they receive a fee for connecting a borrower to a lender — their advice should be impartial. They act in the best interests of their client by seeking out the most appropriate lender and loan arrangement for their needs.
Their role is to offer advice and guidance as well as to negotiate terms on behalf of the borrower. Without a broker, a naive borrower could be at risk of entering into a loan with unfavorable terms, if they are unlucky enough to approach an unscrupulous lender.
Purchasing a new property or committing to a major renovation project is a stressful business. There will be 101 tasks on your to-do list and countless people demanding your attention. Why not simplify the process wherever you can?
Delegating the task of finding and securing bridging finance can help to keep things simple and reduce stress. A professional bridging loan broker will remove the hassle and allow you to focus on the project at hand.
A bridging loan broker has the skills, knowledge, and contacts to make the process of applying for finance simpler and less stressful. Whether you’re a homeowner or a property developer looking to grow your business, engaging the services of a professional broker can ensure you secure the best loan for your purposes. Taking out finance is a big commitment and one better made with the advice, support, and guidance of an industry expert.
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