Bridging Loan Brokers
Looking for a bridging loan broker? Need to understand the costs and if it's worth your while? Find out all the answers and get a broker today!
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Author: Pete Mugleston - Mortgage Expert, MD
Updated: April 06, 2022
When it comes to bridging loans, working with a specialist broker to help you through the process is wise in order to feasibly navigate a constantly shifting marketplace.
With extensive variations from lender to lender when it comes to eligibility, rates, restrictions and terms, the experience can be a minefield. Here we will outline what a bridging loan broker does, what you will need to have in place, how much they cost, and how working with one might help you.
Once you’ve read through all the details below, get in touch or give us a call on 0808 189 0463 and we can arrange for a bridging loan broker we work with to contact you directly.
The following topics are covered below...
What does a bridging loan broker do?
A broker will help you through your application, offer support and work towards saving you time, money and stress.
The bridging loan marketplace is far more complex to pin down than other types of mortgage financing. To the average person, there is a huge lack of clarity in what the borrowing factors are, with each lender doing things differently and reviewing applications on a case-by-case basis.
Brokers who concentrate on this area of mortgage financing have a deep understanding of what’s at play and aim to secure the best deal possible for their clients so they can move forward with their purchase.
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Types of bridging finance they can help with
If you’ve done some reading up on the subject, you might have heard of these types of loans already. A broker will understand these terms in detail and will talk you through the implications:
- Open bridge loan: If you need financing without a fixed date for settling it, for example if you haven’t found a buyer yet or are renovating a property to sell on.
- Closed bridge loan: Brokers will look at finding deals with a fixed repayment date, such as if you’re awaiting completion after exchanging contracts
- First and second charge: Helping you through the small print, which includes laying out the priority of repayments in the eventuality you default. If you still have a mortgage on your current property, this will be the first charge and a bridging loan will be second. If you own your property outright, this is a first charge.
- Fixed and variable rates: These choices in rates work the same as a regular mortgage and a broker will talk you through the best option for you.
The benefits of using a broker
Bridging loans may be a short term commitment but they’re an expensive one. Using insight and experience in this financing niche, the specialist brokers we work with will:
- Have a realistic approach: They know what you and your circumstances are up against and will look at certain parts of the market that might accommodate you. For example, if you have a bad credit history, they’ll know where to direct your application and where to avoid.
- Offer advice: They will suggest what you can do to make a successful application more likely.
- Explain in detail: They will make sure you understand what’s involved and what fees and interest rates you’ll be looking at.
- Search the market: This is a crucial part of the process as they have access to the entire mortgage scope and know where to find the best deals, rates and criteria tailored to you.
- Provide support: Brokers work on behalf of you and look out for your best interests, not the lender. They will negotiate deals for you, ensure costs are competitive, deal with any legal issues and will help to overcome any obstacles that come along.
- Simplify the process: The complexities of bridging loan criteria can be mind boggling. Brokers aim to act as an umbrella system, keeping everything to do with your application under one roof and push to make things move as quickly as possible.
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What you will need to do before pairing with a broker
While they will work hard on your behalf, you will need to meet your advisor halfway when it comes to gathering what you need to move forward. The key benefit of a bridging loan is how swiftly they can be arranged compared with a mortgage. However, this process can be slowed down through lack of preparation.
Some lenders may require a lot of detailed information, so before you speak to a broker and begin your application it’s worth taking some important steps first to speed things up:
- Documents: Make sure you have all the usual required paperwork to hand, such as ID, proof of address and income, bank statements and any other necessary documents, such as valuation certificates.
- Details: Work out what your property is worth, how much you’ll need to borrow and how long you’ll need the loan for.
- Solid exit strategy: Outline how you intend to repay the bridging loan and show evidence of how this will be viable.
What fees you might be charged
Different brokers charge in different ways. Some work on a success-only model, promising to refund any initial fees if they fail to deliver in securing you a bridging loan, so if you’re unsure of whether you will qualify it is advisable to choose one who does this.
Costs vary too, but expect to pay about 1% arrangement fee plus administration costs. Many also provide a free consultation without any obligation to take them on afterwards, so it is worth taking up this offer before you commit to any particular broker.
When calculating bridging loan costs it’s worth remembering that brokers work to save you money in the long term. Even taking into consideration their fee, they could end up saving you significant amounts in charges and interest rates, and their streamlined and efficient methods could help you avoid unnecessary blemishes on your credit report.
Getting matched to a specialist bridging loan broker
With potential obstacles at every turn, our bespoke approach to finding you the right broker boosts your chances of being approved for the bridging loan you need to move forward with your purchase, whether dealing with bad credit history obscuring the possibilities or a desire to buy at auction.
The advisors we work with keep on top of the latest revisions in the market and understand what specific lenders are willing to offer and to whom. They are vetted by us for five-star service and credentials, and we match you up with the right bridging loan specialist tailored to you free of charge.
The experts we refer you to will either only charge a fee when successfully completing your deal, or they will refund any upfront costs you have paid if they haven’t been able to. Call us on 0808 189 0463 or make an enquiry online for a free, no-obligation initial call to find out more.
Yes, you will need to use a solicitor in the same way you would for a regular mortgage. They’ll need to be involved to carry out conveyancing and legal checks once your loan offer is in place, and then for completing and releasing funds.
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About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!