Bridging Loan & Finance Brokers

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Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Jon Nixon

Reviewer: Jon Nixon

Director of Distribution

Updated: December 11, 2023

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

August 25, 2022

When you’re looking to secure a bridging loan, using a broker to help you get the short-term finance you need is extremely useful for many reasons. Largely because a specialist advisor is going to make sure you end up with the right solution at the best price.

This guide covers all you need to know about bridging loan brokers. You’ll find out why their expertise is so effective, the fees involved, and where you can find the most suitable advisor for your loan.

Keep reading for a detailed breakdown or click on a link below to go straight to a specific section…

How a bridging loan broker can help

Navigating through this area of finance can be confusing at times. The market for bridging loans often shifts and adjusts on a regular basis. Using a specialist broker means access to an expert who’s up to date on the latest information. And therefore, able to guide you throughout the whole process from start to finish.

Using an advisor means they can do a deep dive into your finances – including your exit strategy – and then instruct you on the best way to move forward. They’ll also be able to tell you who to approach to get the most competitive loan. Just make an enquiry if you’d like to be put in touch with a skilled advisor.

Here’s an explanation of some specific areas where the expertise of a skilled bridging loan broker can benefit you:

Securing the best rates

With a short-term, interest-only loan like this, lenders tend to charge high interest rates. But, you can still find excellent deals if you know where to look. Many lenders won’t advertise their top deals. Or, some will require an introduction from a trusted broker if you want to access market-beating rates.

Get a 100% LTV with no deposit

Most lenders will only consider loan-to-value (LTV) ratios of 75% or less. But, when dealing with certain loan providers, they’ll be able to offer a 100% LTV. This means access to bridging finance with no deposit. However, to offset the added risk, you’ll likely need to use a high-value asset as security to make this happen.

Speed of finance

One of the main benefits of a bridging loan is the speed of the process. If you’re looking to access a fast bridging loan, using a specialist broker is going to lead to a much faster turnaround time. This is because they’ll have existing relationships with lenders, meaning they can introduce you to the right ones from day one.

Larger and longer bridging loans

Some lenders will have limits on how much they’re willing to offer. Using an expert broker means they can show you those who’d be willing to stretch these amounts to suit your needs and offer larger bridging loans. Other lenders will have maximum timeframes for their loans, a skilled advisor can put you in touch with the appropriate providers.

New investors

If you’re a first-time borrower, or lack direct previous experience, some lenders will be hesitant about offering a loan. By applying through a respected broker, this shows the lender you’re serious. It also means your broker can help prep your application. And, put you in touch with the companies that’ll be willing to offer bridge finance to new investors.

Useful for commercial properties

Getting hold of financing for commercial projects can be tricky, with plenty of red tape and bureaucracy to overcome. There will also be types of commercial properties that some lenders won’t provide loans for. Or, they’ll offer much worse rates for the perceived added risk. Support from a broker means cutting through common obstacles whilst also getting the best rates.

Non-standard construction properties

The type of construction will make a big difference with some loan providers. This is especially true if your plan is to use the property as your exit strategy. A non-standard construction will likely reduce the number of lenders willing to offer finance. Using a specialist broker can help you overcome these issues by introducing you to the right lender.

Bad credit applicants

You might be concerned that a bad credit score will reduce your ability to secure a bridging loan. Fortunately, an experienced advisor will still be able to explore options with you. They can put you in touch with lenders who’ll still consider applicants with bad credit. This is providing the issues you’re dealing with won’t impact your exit strategy.

Bridging to buy land

Using a bridging loan can be extremely useful if you’re looking to buy land for a residential or commercial property. This fast and flexible finance means you can secure the sale quickly, and then work on securing the rest of the funds.

Making use of an expert broker’s knowledge and experience means harnessing their ability to arrange things in the best possible way. The benefit is that this can make it much simpler to satisfy exit strategy requirements. And, they can help you organise and structure the rest of the financing for the project.

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Different types of bridging finance a broker can secure

Here are some examples of the most common types of bridging loan finance that a specialist broker can assist with:

  • Regulated bridging loans: this type of loan is regulated by the FCA (Financial Conduct Authority) and is most suitable for residential purposes. A regulated bridging loan comes with particular rules and restrictions. It will be secured as a first or second charge loan against a property you currently occupy, or plan to occupy at a later date.
  • Unregulated bridging loans: often used for commercial and buy-to-let properties. These loans are unregulated because there needs to be enough flexibility to tailor the borrowing agreement to your specific business needs.
  • Open bridge loan: if you don’t have a fixed date for when you’ll be able to repay, an open loan gives you some added flexibility. But, bridging loans are still only short-term solutions, the maximum term lengths will still be around three years.
  • Closed bridge loan: with this type, you’ll agree on a set date for paying back the loan. This can be a useful choice if you have a completion date for selling the property or exchanging contracts locked in.

How much does it cost to use bridging loan brokers?

The exact fees will depend on a whole host of factors and your personal circumstances. There are brokers who won’t charge you directly. Others will request an upfront fee, and some will only charge you after securing the bridging loan.

Certain brokers won’t charge a fee if they receive a commission from the lender. For brokers who do charge a fee, it’s normally in the region of 1%. Often, there will also be an arrangement fee from the lender of around 2%. How much you’re looking to borrow, the length of the term, and the LTV can all have an impact on the costs.

Most brokers we work with don’t charge an upfront fee. But, we use a fair fee policy. This means that after your free, initial discussion with a specialist broker, they’ll refund any fees if they’re unable to secure your bridging finance.

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Documents to take to your broker

It’s a good idea to gather up all your necessary documents in advance. This little extra step of preparation will help kick off your application in an ideal way, leading to a smooth process from the get-go. Here’s what you should have to hand:

  • Exit strategy plan (your broker can help you create this)
  • Photo ID (passport, driving licence)
  • Proof of address (utility bill, council tax or mortgage statement)
  • At least 3 months of bank statements
  • Income information (payslips, P60s, or tax returns if you’re self-employed)
  • Credit scores (you can download all your credit reports in advance)
  • Details of any appropriate assets or liabilities
  • Relevant documents such as planning permissions or valuation certificates
  • Your solicitor’s contact details

Speak with a specialist bridging loan broker

There are plenty of nuances to this area of lending, and it’s important that you end up with the most suitable solution for your circumstances. You also don’t want to pay more than you need to when arranging a bridging loan.

We offer a free, broker-matching service. This means we’ll quickly assess your needs and then pair you up with an expert broker. Just call 0808 189 2301 or make an enquiry. We’ll set up a no obligation chat between you and an expert bridging loan advisor today.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

Maximise your chances of approval, whatever your situation - Find your perfect bridging finance broker