To ensure that you get the best possible deal on your bridging loan, independent broker support is essential, however, this does not mean that all brokers offer the same range of services and products.
Whether contacting a lender directly or using a broker it is essential to ask the right questions from the outset.
The following are the five most important questions to ask, prior to getting your bridging finance application underway:
- Is a bridging loan the most suitable option for my requirements?
First and foremost, a responsible broker will never exclude other potential funding options from the equation. It is the responsibility of your broker to talk you through the various options available, in order to ensure that bridging finance is the right choice for you.
If it is determined that bridging loans are not the best choice for your requirements, you should be informed as such during the initial consultation. Where a broker refuses outright to discuss alternative funding options, they may not have the applicant’s best interests in mind.
- What security do I need to qualify for bridging finance?
The security being offered will determine whether a bridging loan is possible and to some degree, the rate of interest.
Even if you are looking to purchase or refinance an uninhabitable or a non-standard property or land with/without planning permission, a good broker will advise you on the available funding options and appropriate lenders.
- What are your upfront fees?
Under no circumstances is it advisable to work with a broker that charges upfront fees without performing any work. Any fees and when payable should be clearly listed in the brokers initial documentation.
Most reputable independent brokers collect commissions from the lenders and many also charge a separate fee for the achievement of certain milestones.
- Are there any additional fees for early repayment?
This is an important question to ask as there is every likelihood you will find yourself in a position where you can repay your loan early. Most reputable lenders encourage early repayment, which can bring borrowing costs down to an absolute minimum for the applicant, however, some lenders have a penalty for early repayment and the borrower will incur percentage-based charges for those looking to repay their loans early.
This should be clearly listed from the outset and discussed with your broker before commencing with an application.
- Can I still qualify for bridging finance if I already have a mortgage?
The short answer to this question should be yes, as bridging finance can be offered in the form of a second charge loan, first charge loan or a combination of the two. It may however be necessary to obtain the approval of your existing mortgage provider before the bridging loan can be funded. Your broker and/or solicitor can help with this part.
Discussing any outstanding loans and debts you already have with your broker is important, in order to ensure you get the best possible deal on your bridging loan and pass the lender’s eligibility checks.
For more information on any of the above or to discuss your requirements in more detail, contact a member of the team at UK Bridging Loans today on 0333 3225544.
