Bridging loans are short-term mortgages that are used to resolve short-term liquidity issues. In the market, there is an increasing number of bridging lenders. Many of these lenders are backed by various funding lines or capital pools, each with its own set of lending conditions. As a result, bridging finance firms are often unable to release capital fast enough to be helpful in circumstances where a bridging loan is needed in the first place.
There are also other obstacles to overcome. Regulations, emotions, time constraints, competing advisors, and other factors can affect how easily you can obtain a bridging loan. Securing a bridging loan is a real talent and art for getting the result you want in the time you have available.
Funding11 assists its clients in obtaining bridging loans quickly. Here’s how we make sure your bridging loan application has the best chance of being approved in a short amount of time:
Make use of a lender you’re familiar with and have previously worked with
You need to deal with people you can trust if you need a fast bridging loan. Approaching a firm you’re familiar with, knowing how the company operates, and the lender’s procedures will make the bridging finance phase go far more smoothly. You’re more likely to get the result – and money – you want if you know what the company would ask for, how things are handled, and where the pressure points are.
You don’t know what you don’t know, so taking a gamble on a new lender can be fatal to your contract. What exactly does that imply? You can waste time if you are unfamiliar with the lender’s method, if you make a mistake, or if you have to restart the process. You also face the risk of the lender rejecting your bridging loan application.
Don’t get too worked up about the price
We always offer you two bridging finance options at Funding11. The price for completion next week will be one of the offers. The price for completion the following week will be the other. The cost for completion the following week is often the lower of the two deals. However, it would be best if you considered the entire scenario. You could be offered lower rates if you close next week, but you risk losing the deal if you wait too long. You can choose to take the higher value deal (completion next week) in exchange for the assurance of obtaining the funds on time – this is what many of our clients do.
Bridging finance is a tricky balance that is determined by the transaction dynamics and the stakes involved. You should include all of the offer’s components, not just the monthly interest rate.
Make sure the paperwork is in order
Underwriters oversee the underwriting of bridging loans. Even though there are fewer obstacles to overcome than other forms of loans, the lender can decide based on your profile and the land. You can send any paperwork requested by the lender as soon as possible. Don’t be tempted to skip through bits of information when filling out paperwork, forms, and data. If you need documents to be certified, get them certified. If you must sign a document, complete it quickly and return it to the lender as soon as possible. We’ve never seen a lender provide bridging financing without a clear document order. Your best chance of getting a loan is to send, apply, and sign anything that is asked of you in the shortest amount of time possible.
Do your homework on valuations and avoid making decisions based on the best-case scenario. Bridging loans are backed by property investment. The amount you can borrow is determined by the valuation of the property and the loan-to-value ratio that the lender is willing to give you.
When you first negotiate your case with the lender, you must know the property’s value and offer a clear and truthful value expectation. Remember that a surveyor working for the lender will conduct a professional valuation on the land. There is no advantage to the surveyor in overvaluing the property, and there is plenty of data on which to base a valuation decision. Since your lender will always figure out the property’s actual value, being honest with them from the outset will benefit you rather than disrupt you. You should prepare a packet of details to assist the surveyor in making a decision if you wish. Comparable municipal development plans or receipts for expenditures will aid the operation.
If the property is worth £2 million and you need to borrow £1 million, but the lender only offers 68 per cent loan-to-value, don’t put in a valuation for £2.2 million and assume no one notices – they will. Find a lender who can lend you the money you need depending on the property’s actual value.
Don’t Be Tempted To Cut Your Legal Fees To Save Money
The essential step in getting a fast bridging loan is to hire the best legal team you can. To do so, you’ll need to be willing to pay top dollar for the best. The right lawyer will get you the best deal. A deal will be choked to death by the wrong solicitor, who will then bury the corpse in their cellar!
We have never had a client regret hiring a phenomenal legal team with the skills, knowledge, and inspiration to close the deal. On the other hand, clients have expressed remorse for choosing a less expensive legal team that couldn’t – or wouldn’t – deliver.
Bring the team together, align them, and communicate with them. Communication is crucial to completing a bridging loan quickly. You’ll want someone to take charge of the transaction, be at the centre of it, and ensure that everyone understands what’s required, what the deadlines are, what the next steps are, and that everyone is working for the same objective.
A first meeting to establish a timetable and goals, followed by daily updates, always works. This is how Funding11 works: setting up the initial meeting, getting the ball rolling, and then keeping it rolling. You’ll also want a partner who can politely point out any weak points or possible problems. In the bridging loan industry, it’s not uncommon for otherwise solid deals to fall apart because an issue wasn’t solved or a professional team member’s ego ran amok without being verified. You’ll need a third party to point out these concerns, provide recommendations, highlight responsibilities, and reorganise the team.
Prepare ahead of time, so you’re never caught off guard
Inevitably, complications will arise during the bridging loan application process; after all, an unexpected obstacle is likely to have led to the need for a bridging loan in the first place. It is important to address any problems as soon as possible. Research insurance, access to appraisers, and independent legal counsel are all common issues that can be avoided with proper preparation. If anything unexpected happens, the game isn’t necessarily over. The trick will be maintaining a level head and quickly resolving the problem – seek advice, address it, minimise it, or find a way around it. It is essential to have a team on your side with bridging finance experience, an established track record, and the ability to lead you through any pitfalls.
We’ve seen it all, and we know how to help you overcome the obstacles you’re likely to face while looking for a fast bridging loan. To discuss your needs or specifications, contact a member of our team.
Funding11, the UK’s fastest-growing finance brokerage, makes your life easier by locating a quick bridging loan. We’ve seen it all, and we know how to help you overcome the obstacles you’re likely to face while looking for a fast bridging loan.
Visit the Funding11 website to apply for a bridging loan online, or call us now at +44(0)020 3475 9299 to speak with a specialist finance broker.