Faced with falling income, brokers must find fresh deals to sell and bridging loans have piqued their interest.
This is unsurprising as bridging lenders do not need the struggling securitisation market to provide new lending.
As a result some brokers are having more success with appropriate bridging cases than with their traditional business.
We are seeing a growing number of applications because when traditional mortgage products have been withdrawn by lenders at a late stage in the process, bridging loans can save the day.
Of course, this depends on there being no hidden costs such as minimum terms or early repayment charges plus viable exit strategies.
But the quality of cases we are receiving varies and we’re seeing a higher proportion of cases where we cannot offer loans.
This is a pity because brokers have taken time to arrange these applications and have raised their customers’ expectations as a result.
But this failure rate can be improved if brokers who are diversifying into bridging loans take the time and effort to understand the ideal circumstances for this type of lending.
For example, it best suits clients who are asset rich but time and cash poor.
If these customers are involved and there’s a definite exit route from the bridging loan – for example, the property is being sold or fits the terms for remortgaging with a mainstream lender – the chances of success are greatly increased.
To help them understand the basics of bridging lending and to allow them to diversify into the sector, we have
developed a training pack that we are presenting to brokers.
If readers are interested in this service, please contact sales manager Maeve War on 0845 257 2444 to arrange an appointment.