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How to Choose a Bridging Loan Broker?

How to Choose a Bridging Loan Broker?

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With so many lenders to choose from and substantial variances in eligibility policies, selecting the right bridging loan broker is essential to secure quick, affordable borrowing.

Revolution Finance Brokers is an independent, whole-of-market broker with years of experience in the bridging finance sector.

Here we'll explore what you should look for in your broker, and what different services are available.

For more information, or to get your bridging loan application started, give us a call on 0330 304 3040, or drop a message to info@revolutionbrokers.co.uk.

The following topics are covered below:

What Type of Bridging Loan Broker is Right for Me?

What Documents Will a Bridging Loan Brokers London Need?

Where Can I Find the Best Bridging Loan Broker Rates?

How Can I Find the Best Bridging Loan Broker?

How Can a Bridging Finance Broker Improve My Chances of Approval for a Loan?

Can a Bridging Finance Broker Reduce My Deposit Requirement?

Do I Need a Regulated or an Unregulated Bridging Loan Broker?

How Much Do Bridging Loan Brokers UK Cost?

Expert Advice from the Bridging Loan Brokers London

What Type of Bridging Loan Broker is Right for Me?

There are lots of different brokers, and some of the categories we cover include:

  • Bad credit bridging loans.

Specialist brokers and lenders can offer alternative financing to applicants with bad credit history who need niche borrowing. In this situation, the strength of your exit strategy is key to securing affordable rates.

Our team works with applicants with all sorts of credit issues, including low credit score, missed mortgage payments, CCJs, DMPs, IVAs, repossessions and bankruptcy.

Provided you have a viable proposition and can prove how you will pay back the debt; you can usually find competitive bridging finance.

  • New property developers.

Many lenders steer clear of new property developers seeking a bridging loan and require a minimum number of years experience.

The Revolution teams work with first-time investors of all sizes, securing affordable bridge finance by negotiating with niche lenders who offer flexible lending policies.

  • Unusual bridging loan projects.

Just as with mortgages, non-standard properties are considered a higher risk - so if you need a bridge loan to buy commercial premises in a particular sector, you need a lender who has experience dealing with non-standard bridging loan applications.

  • Commercial property bridge finance.

In some cases, lenders will offer bridge loans for residential investments, but not for commercial properties. Others exclude particular types of commercial buildings, such as restaurants and petrol stations.

  • Second charge bridge borrowing.

First charge bridge loans are easier to come by since the lender has the assurance of holding first charge security against your property.

Suppose you have an existing mortgage and need a bridging loan as a second or third charge. In that case, you can find a bridging loan through a lender with a different risk policy but will need to prove you have sufficient equity, and usually require a higher deposit level.

  • 100% LTV bridge loans.

Should you not have a deposit available, you might struggle with some of the larger bridging loan lenders who offer LTV values capped at around 70% or 75%.

There are 100% bridging loans out there - so it's a case of demonstrating that you have sufficient security to make the loan an acceptable risk to a lender.

What Documents Will a Bridging Loan Brokers London Need?

The process of obtaining a bridging loan is essentially the same as that of getting a traditional mortgage.

Lenders will want to know a bit about you, the applicant, as well as the facts of the property or asset you wish to use as collateral for the bridging loan. The following details will be required, but are not limited to:

  • Your credit report. A solid credit score with no negative information will always put you in the best position to get an excellent bridging loan rate.
  • Identification and proof of address. The standard address evidence and photo ID, such as a passport or driver's licence, will be required.
  • A report on the value of the property. This valuation will include information about the property or asset you intend to use as collateral for the bridging loan and its current value, as well as the value at the end of any anticipated development.
  • The specifics of your exit strategy. This plan could include formal details of the anticipated Schedule of Works or an Agreement in Principle from the onward lender if you're negotiating alternative financing.
  • Knowledge of real estate. It will be necessary to provide information about your previous experience working with real estate. You can acquire a bridging loan even if you have no prior property experience, but the lender will closely examine the proposal.
  • The amount of deposit available. The decision to lend is based on the risk to the lender. A higher deposit will not only make you a bet, but it will also increase your chances of securing a reasonable rate.
  • Proof of Income. Some lenders may need documentation of a secondary source of income to help cover any unforeseen charges. They may request bank statements as proof.

Where Can I Find the Best Bridging Loan Broker Rates?

There aren't standardised rates, and the terms you are offered will be heavily dependent on factors such as:

  • How viable your exit strategy is.
  • Your credit rating.
  • What security you are offering.
  • How much experience you have in the sector.
  • The deposit you have available.

Generally, a deposit will be required for at least 30% to 35%, but if you can offer 40% or above, the rates available will improve.

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How Can I Find the Best Bridging Loan Broker?

The best bridging loan broker should be independent, whole-of-market, and with expertise in bridging finance.

Revolution has years of experience negotiating even complex bridging deals and are always here to provide impartial advice.

How Can a Bridging Finance Broker Improve My Chances of Approval for a Loan?

The lender will independently review and risk-assess your application and also explore how reliable your exit strategy is.

Some lenders will accept an application that others will refuse, so a specialist broker is essential to determine which lender's criteria you can comfortably meet.

Can a Bridging Finance Broker Reduce My Deposit Requirement?

It depends - but an experienced broker can substantially increase your chances of approval and structure an application that mitigates any perceived lender risk to reduce the potential that a provider will require a larger deposit.

There are 100% LTV bridging loans, but the lender will always need robust security to ensure the application fits their risk profile.

If you have a lower deposit, you should work with an independent broker. We can identify lenders with less strict criteria who are most likely to consider a bridging loan project at a higher Loan to Value.

Do I Need a Regulated or an Unregulated Bridging Loan Broker?

The critical difference between regulated and unregulated bridging loans is that regulated finance, with FCA oversight, is required for loans secured against your home, or a property you expect to live in.

Unregulated bridge loans apply to everything else, from commercial lending to buy to let investments.

If you're looking for residential property bridging finance for your home, you will need to select a bridging loan broker with FCA regulated advisers.

How Much Do Bridging Loan Brokers UK Cost?

Lots of clients come to Revolution having been turned down for finance, or quoted very high charges from another broker - and we'll ensure that you always get the best deal available!

The industry standard is around a 1% arrangement fee, but a lot depends on what sort of loan you need, how quickly, and the circumstances.

Expert Advice from the Bridging Loan Brokers London

Whichever deal we recommend, our team ensures you secure the most affordable borrowing, whether that is through finding lower-cost lending, more flexible terms, or a bridging loan through a specialist lender, only available with an independent broker.

Give us a call to get started on 0330 304 3040, or drop a message to info@revolutionbrokers.co.uk.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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