There are certain things that you need to be aware of when selecting a financial partner to help you succeed in your property investment goals. It may seem that the bridging loan companies all look the same, but if you dig a bit deeper, you might be surprised at what you might find:
Controlled by the Banks?
Something you may not know, but will have a critical impact on your bridging loan application, is how your prospective bridging finance lender is funded. It is often the case that the bridging loans provider has several layers of funding, that may comprise 60-70% from a major bank, topped up with 20% from a hedge fund, and another 10% from private investors.
The reason that this is important is because the lender that is lending the highest amount – the high street bank – calls the shots. This means that the high street bank whose restrictive criteria you are trying to avoid, is actually underwriting your application behind the scenes – even though you think you are dealing with a bridging loan company. This obviously impacts on the likelihood of getting a green light on your bridging finance application. Even worse, you might have been given the okay throughout the whole application process, with expensive valuations instructed, only to find out at the last minute that the faceless credit committee says no.
Are loans really 70% Loan to Value – or Loan to Purchase Price?
Many lenders advertise headline LTV’s of 60% -70%, or in some cases even higher. However, the devil is in the detail – buried in the small print you will often find “Loans or based on a percentage of value – or purchase price, whichever is lower”.
All those budding investors who think they can snap up an under value bargain from the administrator with 100% funding had better think again.
So why pay expensive bridging finance interest rates when I might as well go to a bank?
Good question. Many bridging loan lenders require full underwriting. They will insist upon 3-6 months bank statements, copies of your tax documents, and a copy of your chartered accounts from your business. Not only that, but they will then insist that you must put down 30-40% deposit!
To save all of this hassle, ensure your bridging loan provider only deals in non status bridging finance, with loans based on value, not purchase price, and funded exclusively by private investors; just like Tiger Bridging.
About Tiger Bridging:
Tiger Bridging is a specialist bridging finance provider with over a decade in the market. They provide short term property funding solutions across the whole of the UK, offering bespoke and flexible lending terms.
Their funding is free from the restrictions imposed by larger institutions or the mainstream lenders. Their small stable of valued and fast-moving investors, provide a steady and reliable flow of capital to clients. If the deal makes sense, they can get the funding, regardless of the credit status of the client.
Tiger Bridging Ltd
152 City Road
London, EC1V 2NX
Contact: Matthew Dailly
Tel: 0207 965 7261