The pitfalls we help you avoid
Funds not being available for completion
As hard as it can be to believe, this does happen. You can imagine the frustration of going through valuations and the legal process, only to hear the bridging finance lender has run out of funds.
We do due diligence on the lenders and use the largest lenders that have back up credit lines to meet the customer requirements.
The Loan to value (LTV) issue
LTV is given as a percentage. So you will see advertising such as "advances up to 80% LTV". The issue is the lenders have different definitions of what a valuation is. We have given a full page to show how this can impact you on our loan to value page
Being sold an attractive headline interest rate
We don't just look at the headline interest rates but consider the whole cost of borrowing. This includes the Bridging finance fees, exit fees, daily or monthly interest calculation, minimum terms and a host of all charges.
One of the lenders we have seen advertises a headline rate that looks to be 40% cheaper than any of the competition. However in the small print the product carries a two month interest penalty at redemption and a 5% fee should the term be renewed. When you add a host of other charges, it makes the product far more expensive.
Having a grievance but not having anyone to approach it with
If the Bridging loan is not regulated then you have no grievance procedure run by the government. This is why we prefer to use lenders that are members of the Association of Short Term Lenders (ASTL), which operates an independent procedure that customers can submit a grievance too, should the need arise.