Why Use a Broker for a Bridging Loan Application?

Can a broker make a significant difference to your bridge finance application? This guide explores all the pros and cons and situations where a broker could be a powerful negotiating tool.

  • Type of loan
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  • £7,500,000
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Why Use a Broker for a Bridging Loan Application?

A bridging loan broker is invaluable in ensuring you find the right borrowing at the right time and the right price!

Bridging finance is a hugely flexible option and can be a solution in many situations, for example:

  • Buying a property at auction within the 28-day payment deadline.
  • Financing an uninhabitable purchase for renovation.
  • Short-term financing while pending a mortgage application.

However, there is a vast array of products available, and you must choose the one that is right for you. Bridging finance brokers don't only ensure you get the capital you need as quickly as possible - but negotiate the terms and fees associated to save you money.

Here we'll explain how to find the best bridging loan with a tailored consultation from the experts.

For further information about finding a competitive bridging loan or why it's inadvisable to go it alone, give the Revolution team a call on 0330 304 3040, or drop us a message at info@revolutionbrokers.co.uk

The Value of Using Bridging Finance Brokers

While a property bridging loan might be the easiest solution to finance a development, purchase, or investment, speed mustn't become a priority over affordability.

The challenge here is securing the best bridging loan interest rates, but doing so under time pressure - so having an expert on property bridging loans to hand is crucial.

As interest in flexible financing and mortgage alternatives grows, so does the number of bridging loan products on the market.

Making an intelligent choice quickly isn't a decision to be taken lightly. The wrong property bridging loan could cost thousands of pounds more than it needs to!

Independent bridging loan experts can help to navigate the breadth of choice on offer, and ensure you get the advice you need to make informed judgments.

What Does a Bridging Loan Broker Do?

Our role is to consult you to determine what financing you need, when, for how long, and for what purpose.

From there, we scour the sector as a whole-of-market bridging finance broker to identify the most beneficial products and rates available.

Consulting a bank, or your usual lender, unfortunately, can't be as secure a service.

These advisers are bound by the specific products they offer or advertise, so they cannot compare more attractive deals or provide an alternative solution outside of their product list.

As independent bridging loan brokers, mortgage brokers negotiate with the lender directly - whether that's to haggle on the rates, extend the term end date, or discuss a complex application to ensure all the details are dealt with.

We work for you to make sure your bridging loan is the best possible deal out there.

Is Using Bridging Finance Brokers Mandatory?

Not at all - you can choose to make your own decisions about which bridging loan is the best option. However, broker-exclusive deals are almost always better than anything you'll find on the open market.

Likewise, lenders may advertise some products and rates but cannot offer their lowest terms depending on the circumstances.

In these situations, your bridging finance brokers get to work, identifying other cheaper products or negotiating with the provider to come to a compromise in your favour.

There are several reasons we'd always recommend using a bridging loan broker:

  • Some of the top lenders offering specialist products only deal with brokers - they don't sell directly to the public.
  • Making sure your application is watertight is essential to achieving fast approval. An experienced broker will stress-test your application and identify any potential queries to speed up the process.
  • Bridging loans can be regulated and unregulated, and you must apply for the most suitable type of property bridging loan.

What Are the Pros and Cons of Using a Bridging Loan Broker?

So, if you're unsure whether using a broker to find the best bridging loan products is the right call, we'll run through the advantages and disadvantages.

Benefits of Working With Bridging Finance Brokers

  • Save Money: Revolution negotiates to ensure you get the lowest interest rates possible. We also minimise lender fees and evaluate any potential risk factors in your application to ensure the rates offered are highly competitive.
  • Access Exclusive Products: New bridging loan products come onto the market all the time, so it's almost impossible for someone outside the sector to have instant access to the most advantageous deals. Revolution is whole-of-market, so recommends any loan from any lender we think best suits your circumstances.
  • Choosing the Best Bridging Loan Lenders: It can be tricky to work out which deal is best. Low-interest rates coupled with high arrangement fees or great deals but with little flexibility are challenging to compare like-for-life. A bridging loan broker identifies the best lenders, assessing your risk level, and matching you with lender's whose policies you will quickly comply with.
  • Secure Your Loan Faster: Bridging loans are much quicker than a typical mortgage application, provided the documentation is in good order, and you respond quickly to any queries. Bridging finance brokers advocate on your behalf and manage all the paperwork intricacies to ensure the process is completed significantly faster.
  • Reduce Stress Levels: We hear all the time from clients who have become highly stressed with their bridging loan application. Countless queries, number crunching and demands for more documents can all make the process seem challenging - but not if you have a bridging loan broker on your side! So we'll take the strain and manage the situation from end to end to ensure it doesn't cause any headaches.
  • Independent Guidance: Independence matters, because otherwise you're just being sold a property bridging loan by a salesperson. We're a fully independent bridging loan broker, so ensure you know every advantage and disadvantage of a deal before you sign a single piece of paper.

Are There Downsides to Using a Broker to Apply for a Property Bridging Loan?

We'd be remiss not to mention disadvantages - but there are very few!

Fees are usually one of the most significant barriers to investors or buyers seeking independent advice.

Unfortunately, that inevitably means spending thousands more on high arrangement fees or steeper interest charges than necessary.

Some brokers can charge significant fees, but Revolution provides a fully transparent service, so you know upfront whether there are likely to be charges payable or whether the lender covers your bridging loan brokerage services.

Be wary of any bridging finance brokers who won't share their fee schedule - that usually means you're in for a nasty surprise later down the line!

The other factor to think about is the quality of your bridging loan adviser. An inexperienced broker can make things more complicated or fail to have the negotiating power to secure a competitive deal.

Revolution Brokers are proud to be experts in the bridging finance field, with years of experience negotiating even complex deals. So you're assured of robust representation no matter the size of the bridging loan you need.

How Can I Choose the Best Bridging Loan Provider?

So, your choice of lender will be influenced by many factors:

  • How much you need to borrow - many lenders have minimum thresholds or maximum caps, so it's vital to apply to a bridging loan provider who offers loans in the region of the amount you wish to apply for.
  • How long you wish to borrow it for - again, it's all about matching a lender with your needs. Most bridging loans run for up to one year, but we can secure property bridging loans for up to 18 months, two years, or even three in the right circumstances.
  • Why do you need a bridging loan? The best bridging loan lenders tend to focus on key sectors or areas of the property market where they're most familiar and, therefore, reduce potential risk exposure. A bridging loan broker will always ask what the loan is for and make sure you're directed to the right place.
  • Your circumstances - anything unusual, such as bad credit, being in new employment, being self-employed, applying as a first-time property developer, or purchasing an investment renovation for the first time, can lead to a rejection by a mainstream property bridging loan provider. Revolution Brokers makes sure you are connected with a suitable lender who is comfortable with your circumstances.

All of these factors mean it's usually highly inadvisable to apply for the first bridging loan you find - the best bridging loan will be tailored to your needs and be far more cost-effective than a generic product.

How Much Does a Bridging Loan Broker Cost?

It's tricky to give an exact value - because property bridging loans are always arranged on a case-by-case basis!

For example, you might need a bridging loan to:

  • Buy a one-off conversion project, refinanced through a residential mortgage.
  • Invest in a buy to let property at auction, with a BTL remortgage as the exit strategy.
  • Cover development costs for a significant HMO renovation refinanced through the property sale.

Each project is likely to be unique, and the amount of professional guidance and application support varies considerably.

However, it is undoubtedly more cost-effective to work with an independent, whole-of-market bridging finance broker than to attempt to manage the application process yourself.

Even simple negotiations on flexible end of term dates or lowering the interest charged by a few percentage points can make a tremendous difference to your total project outlay and far outweigh any of the initial broker's fees to put the deal in place.

Can Bridging Finance Brokers Help With My Exit Strategy?

Indeed we can! The exit strategy is a fundamental requirement for any property bridging loan.

The borrowing is short-term, so the lender must be confident you have a robust plan to pay them back when the loan ends, usually within a year or 18 months.

Exit strategies for property bridging loans can include:

  • Refinancing - through a residential, commercial or buy to let mortgage.
  • Property sale - selling the developed property and repaying the bridging loan with the proceeds.
  • Selling another portfolio property - selling an alternative home and using the profits to pay back the borrowing.

Those are some of the typical exit strategies but by no means an exhaustive list.

Again, a bridging finance broker is vital. We'll evaluate your exit strategy and compare it to our insights into the lender's policies to determine whether it's likely to pass the assessment process.

If not, we can recommend a range of options:

  • Using another asset or property as additional security.
  • Applying to a different lender with a more flexible risk appetite.
  • Opting for an alternative exit strategy.
  • Providing independent valuations or market analysis reports to support the estimates regarding the finished property value or possible sale price.

Getting Started With a Bridging Loan Broker

If you're unsure whether a property bridging loan is a suitable solution or want to compare the pros and cons of different home loan products on the market, give Revolution Brokers a call on 0330 304 3040. You can also email the team at info@revolutionbrokers.co.uk.

While bridging loan finance can be an excellent option if you need flexible borrowing in a brief timeframe, it is one of many financial products on the property lending market.

Our independent team of bridging loan brokers will ask for information about your property plans and provide advice based on our experience regarding the ideal product, or the best bridging loan, that fits with your needs.

You don't need to be ready to buy and can arrange a bridging loan in principle.

For example, if you're keen to attend a property auction and think you may bid for a lot, you can organise a bridging loan in advance, and then rest assured that you won't struggle to meet the 28-day payment deadline if you place the winning bid.

The easiest way to get started is to call or email the team, and we'll arrange a convenient time to chat with one of our bridging finance brokers.

If you'd like any information about property bridging loans, again get in touch, and Revolution Brokers will help you make significant decisions and find the best bridging loan products for you.

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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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