Applying for bridging loans – brokers vs. applying directly

Monday, 20 February 2012 02:05

Applying for bridging loans is not hard

Applying for bridging loans is not hard

If you have used the services of a broker to buy a mortgage in the past, you may believe that this is the best way forward when it comes to taking out bridging finance as well.

There is certainly a case for going through a broker.

They will source various deals and talk you through them. They will also complete the application form and liaise with the company on your behalf, meaning there is little work required on your part.

So if you are unwilling or unable to deal with the process yourself, the appeal of using a broker can be hard to ignore.

However, there are various downsides to using a broker that you must take into account before you decide which way to go.

To begin with, applying for a bridging loan is a simple process. Bridging loan companies will ask you to provide various pieces of information, including any mortgage arrears you have, the value of your property and any debts you may have.

These are all details that you can easily find out yourself. Once you have the information required of you, the next step is to simply fill out the form, which will take a matter of minutes if you are fully prepared.

As a result, you do not really need somebody else to take care of this for you.

Brokers work on commission and receive a fee from the lender who you ultimately decide to go with. They therefore have vested interests, so you must keep this in mind.

One benefit of going through a broker is that they will source various deals and present them to you for you to choose, so you do not have to sit down and explore what different companies are offering.

This will save you time, however, brokers are unlikely to explore every offer and may instead present the five most popular products. This means that you may miss out on a better deal.

If you take these points into consideration, you will see that there is a strong case to be made for handling the loan application process yourself.

The forms are easy to fill out, the information required of you is not particularly complex and it does not take too long.

What's more, you can seek advice on bridging loans free of charge if you contact the lenders directly.

Bridging loan companies are more than happy to talk you through the process and answer any questions you may have, so you can get any help that you need.

This has the added benefit of allowing you to communicate with the company, spell out your needs and discuss with them the best way forward.

Whether you decide to go through a broker or carry out the process yourself, you must be absolutely sure that a bridging loan represents your best option.

To do this, you need to compare them to other forms of finance available to you and weigh up the advantages and disadvantages of each before coming to a decision.

If your funding needs are temporary and you have a clear exit strategy, a bridging loan could be a very useful way of raising the money you need.

However, if you have underlying funding problems, you may benefit from exploring other avenues.
 

 

Comments

Finance articles

  • Is a bridging loan right for budding entrepreneurs?

    Raising the money you need to start a business can be hard, however, there are alternatives to bank loans. Among them are bridging loans, peer-to-peer lending and borrowing money from friends and family, meaning you need to do plenty of research.

  • Important questions to ask bridging loan companies

    Before taking out a bridging loan, you must understand a number of key points. These include the rate of interest you will be charged, the length of time you have to repay the loan and whether there are any arrangement fees that apply.

  • Why bridging loans are only suitable for short-term funding

    You should only consider bridging finance if your funding needs are temporary. This is because the high rates of interest make bridging finance unsuitable as a long-term solution, so if you have long-term needs, you should look at other options.

  • Banks vs. specialist lenders – which bridging loans are best?

    Both banks and specialist bridging loan companies can provide the bridging finance you need, meaning you need to compare products from a range of providers. You need to look at factors such as interest rates and arrangement fees.

  • Can bridging loans work for those who only need small amounts?

    Some bridging loan companies will lend up to £5 million if you have sufficient equity in your home, however, what if your borrowing needs are more modest? If you need a sum of £10,000, bridging loans can still be an option.

View More Articles

Related stories

The cheapest ways to pay off Christmas debt

Make sure the only way is up for your finances in 2013

If you are dreading your next credit card bill after living it up over Christmas then take control of your finances and find the cheapest method to pay off your debts.

Will you be paid if you can't get to work because of snow?

What are your snow employment rights?

If you have been unable to get to work today because of the snow, what are your employment rights? will you be paid or will you have to take holiday or make the hours up?

Unwanted Christmas gifts: What are your consumer rights?

Customers have rights if they have been sold poor quality items

As the dust settles on another Christmas many people will be thinking what to do with unwanted gifts. Our guide explains your consumer rights on refunds and returns.

How will personal finance trends affect your finances in 2013?

What does 2012 hold in store for your finances?

Myfinances.co.uk presents the second part of our in-depth analysis of how your finances will be affected in 2013 focusing on the likely trends in personal finance in 2013.

A parents guide to student finance

It is possible to lessen the debt a student has on graduation

Students face a daunting financial legacy at the end of their studies. Find out how you can help as a parent.

The top ten credit cards for Christmas spending

The best credit cards for Christmas shopping

Make your spending work for you this Christmas – earn cashback, points and rewards for festive spending or choose the card that gives the longest interest-free period.

Ten expert pension tips on how to plan for your retirement

The key to a comfortable retirement is financial planning

The New Year is a good time to review your pension provisions. Pensions experts McCarthy & Stone run through ten expert tips to help you take control of your future.

Resolve for a better financial year in 2013

Go all inclusive for your next holiday and save money

For many people, making a new year's resolution is a light-hearted attempt at ensuring the following year is better than the last but, if you've struggled financially in 2012, resolving to manage your money better in 2013 could have a far-reaching, positive impact on your life.

Newsletter sign up

Interests

In addition to the weekly newsletter, which areas of finance would you like to hear from us about:

Tick this box if you would like us to send you promotions from carefully selected third parties.

By signing-up you agree to the terms of use and privacy policy.

sign-up button

Get the latest information on: