October 25, 2021

Why Is It Important to Hire a Bridging Finance Broker?

With over 500 bridging lenders in the fragmented bridging market, it is crucial that both new and experienced property investors use the services of a specialist bridging finance broker.

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are saying

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Streatham - Martin
Matthew and the team at Tiger are a pleasure to deal with. Friendly...
Carlisle - Mohammed
Without question, our development finance broker of choice. Ver pleased.

With over 500 bridging lenders in the fragmented bridging market, it is crucial that both new and experienced property investors use the services of a specialist bridging finance broker. This blog will elaborate on the importance and advantages of working with an experienced and well-connected bridging finance brokers such as Tiger Financial. It will also discuss bridging loans in general, so you are fully clear on how they work before you apply for one.

Roles of a Bridging Loan Broker

Bridging finance brokers – also referred to as bridging loan brokers – act as the intermediary between the borrower and the lender. If you need a bridging loan to fund a property transaction, such as when carrying out a refurbishment or buying a property at auction, they will give you expert advice on what options are available and which are most suitable for your own circumstances. They will then help ensure that the loan process runs smoothly to its conclusion. 
 
A bridging loan broker works with the applicant’s best interests in mind rather than the lender’s. They should focus on finding the best deals for you and your current circumstances. However, to do that, brokers also need to have cultivated productive relationships with a range of lending companies, and indeed, the market is so large and fragmented, only a specialist bridging finance broker will truly be able to help you navigate the funding maze.
 

Are Bridging Loan Brokers Required?

There is no obligation to use bridging finance brokers to find the loan you need to fund your transaction. You are perfectly at liberty to approach lenders on your own behalf about their offers. However, often the best rates are reserved for brokers with long-standing relationships with the lender, so in many cases, you could save money by using the services of a specialist broker.
 
However, working with a bridging loan broker can make the bridging loan experience easier and quicker to see through to completion. As well as scouring the market for appropriate lenders for you, they are also responsible for giving you advice to inform your decision on which loan to take up. Additionally, they will guide you throughout the entirety of the bridging loan process.
There are some lenders offering regulated bridging loans who will only accept applications through a broker. Regulated bridging loan lenders do this because it protects both them and the borrower against financial loss. If you’re applying for a regulated bridging loan, the advice you receive from your broker will help ensure you have made a well-informed decision before proceeding with a loan. 

Brokers have also extensively researched the market and have built up relationships with a wide range of lenders, so by working with one, you will have better access to a greater number of lenders. This improves your chances of finding the right fit for your own unique circumstances.

The Importance of Working With a Bridging Loan Broker

1. Can save you money

Bridging finance lenders assess each applicant on a case-by-case basis; and there is always room for negotiation when it comes to whether the loan is approved or not and at what rate. A good bridging finance broker in London will familiarise themselves fully with your situation and circumstances and will be able to address any perceived negatives a lender may raise. They also have the experience to negotiate on your behalf to reduce any lender fees and secure you the lowest possible rate on your loan when they can.

Having a specialist representing your interests during negotiations will take a lot of the pressure off you. With their experience, they can often argue your case more effectively than you could.

2. Reduces the stress on handling the loan application

There is a great deal of work involved in applying for a bridging loan, not least if there are time pressures involved. From researching the market to making loan applications, dealing with lenders, taking care of all the paperwork and legalities and more, the loan process can take up a huge amount of your time.

A bridging loan broker can handle much of this for you, reducing the stress and freeing your time up to focus on other aspects of the transaction.

3. Time is money

As noted, winning fast approval for a bridging loan involves a huge amount of work and effort, from the initial application to completion. Working with a broker means you know you have everything under control, and that there’s always an expert paying constant attention to the situation.

With a broker doing the legwork for you, all you need to do is focus on the tasks that only you can do, like providing documents and personal information, for instance.

Are you interested in taking out a bridging loan in the UK? It’s well worth looking at the services we offer here at Tiger Financial. Our company is a leading bridging finance broker in London specialising in all types of bridging loans and development finance.
We have more than ten years of experience in the market and are committed to providing industry-leading funding solutions for residential and commercial properties alike.

By working with us, you are guaranteed to receive the help and advice you need through the entirety of the lending process – from the loan inception to its closing. Our website also has useful tools, such as an exclusive bridging loan calculator, to help keep you informed of all you need to know.

For more information about our services, get in touch with us via our contact page at https://tigerfinancial.co.uk/contact-us/. If you have any questions not addressed in this blog, you can contact us by phone on 020 7965 7261 or via email at hello@tigerfinancial.co.uk.


Frequently Asked Questions

Do You Pay a Finance Broker?

Some bridging loan agents charge the borrower, but others take payment from the lender instead. Often, the lender will pay a financial broker commission for introducing you to them. Some lenders may also pay brokers an ongoing fee for the duration of the loan, which is referred to as “a trailing commission”. 

What Does a Finance Broker Do?

A bridging finance broker arranges loans in exchange for payment fees from the borrower, the lender or both. A broker scours the market on the borrower’s behalf to find the best loan, taking into account all relevant circumstances. They negotiate terms and assist with the paperwork. Good brokers have extensive networks to secure the best terms for the borrower.

How Much Will a Bridging Loan Cost Me?

There are several factors that can affect the costs of bridging loans. Normally, bridging loans include an arrangement fee which may be a percentage of the loan amount (typically 1-2%).  You will also pay interest on your loan, which is typically higher than a standard mortgage, but remember, a bridging loan is only a short-term arrangement and used when a mortgage is not available, so this is not a valid comparison.  

 What Is Bridging Finance, and How Does It Work?

Bridging finance is a short-term and flexible funding solution used by property investors to take advantage of opportunities where a normal mortgage would not be possible, such as carrying out a refurbishment or when repositioning the asset, such as changing the title or the planning.  Bridging is also used when time is of the essence, such as when buying at auction or staving off a repossession. 

When Would You Use a Bridging Loan?

Bridging loans are used for purchasing or renovating properties. If you need money quickly in the short-term before securing longer-term finance, like a mortgage, taking out a bridging loan can be a useful solution. Developers and private individuals can use bridging loans to ensure they don’t miss out on great opportunities, such as purchasing an investment property at auction. 

How Long Do Bridging Loans Take?

Various factors can affect the speed with which bridging loans can be completed. The process can take anything from 72 hours to several weeks. The area is complex, but an expert bridging loan broker understands lenders’ requirements and, provided the applicant can supply the necessary information and paperwork, can ensure the transaction is approved as quickly as possible. In most cases, a loan will take around 4 weeks to complete. 

About Bridging Finance

Bridging finance is a short-term flexible funding solution that allows property investors to acquire or reposition property assets when normal mortgage funding is not available, such as when carrying out heavy refurbishment, or splitting a title or changing the planning. 
 
Many methods are available to companies that want to secure bridging financing, but this mostly depends on their history and credit profile. The better their status, the more options are open to them. No matter what your circumstances, there should be a bridging finance option available to you, the only difference being that if you have adverse credit, a niche property or challenging circumstances, then the price of the loan may be slightly higher than normal.

The Basics of Bridging Finance

Bridging finance is a short-term flexible funding option used by property investors and developers to take advantage of investment opportunities that are not eligible for mortgage funding. For example, a bridging loan can be used to refurbish a property, purchase quickly at auction, reposition by splitting the title or changing the consent, or even to raise equity for investment in further acquisitions.

Bridging financing terms and conditions tend to be more flexible than a normal mortgage. Interest rates can range from 0.4% per month to over 1% in certain circumstances. These rates may appear expensive compared to mortgages. However, they are two different products that are used for different purposes, so they should not be compared.

If you would like more detailed information about bridging finance, call one of our highly experienced bridging loan representatives here at Tiger Financial.

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Tiger Financial is directly authorised by the Financial Conduct Authority (FCA) no 915106. The FCA does not regulate all mortgage or bridging loan products. Think carefully before securing debts against your home. Your property could be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

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