The holy grail of low cost and high service in bridging finance

Most articles about unregulated bridging finance focus on its different uses or the importance of great service. Sometimes both.

What isn’t talked about so much, but is also vital, is pricing. At the end of the day, businesses make more profit when they get the most suitable goods for the lowest cost. In the bridging sector, outside of ultra-high LTV deals or highly illiquid properties, your clients should no longer have to compromise on cost.

There are many bridging lenders to choose from now. There are also useful comparison tools which are designed to give an idea of the most appropriate lenders to approach with each enquiry. However, despite this, comparing unregulated bridging lenders’ true costs is not always simple. Here are a few things to be aware of when assessing their terms.

Question the fees

The standard fees in bridging are arrangement fees (from which the broker commission is paid), legal fees and valuation fees.

Additional fees that are not standard include admin fees, title insurance fees, capital repayment fees, fees for the lender to send a letter or make a call and so on. These extra costs can amount to several thousand pounds per facility. At Funding 365 we don’t charge any of these additional fees on our core bridging products.

What's more, our fees are clearly outlined upfront in our straightforward two page Heads of Terms document.

Check whether your terms are indicative or credit-backed

Indicative terms are at risk of being amended further down the line when assessed by those who make the final credit decisions, with interest rates increased or LTVs reduced.

At Funding 365 our Heads of Terms are credit-backed as they are issued by our mandated underwriters and hands-on directors rather than BDMs (we don’t actually have any BDMs) and our funding is principal-led so we don’t have to consult any external credit committees.

Don’t assume that higher cost equals better service

It is widely understood that some of the specialist banks who tend to sit at the sharp end of pricing (because their funding is inexpensive) have slow and impersonal processes.

However, some specialist lenders - like Funding 365 - offer low cost bridging finance in the ballpark of the banks without compromising on their service levels. Our market-leading Stepped Rate Bridge has interest rates from just 0.39% per month for the first 6 months (rising to 1.15% per month from month 7) and our flat rate Residential Bridge has interest rates from 0.69% per month. View our transparent product guides here.

Ask who will be processing your loans and how you can contact them. Most lenders have multiple departments involved in each loan, which can create a slow, disjoined experience.

At Funding 365 one expert underwriter will take your case from enquiry all the way to redemption and is always available by phone or email. Our 100% 5 star Google and Trustpilot reviews attest to this.

The bottom line is that the bottom line is crucial for the success of property professionals. Luckily, options now exist for borrowers to achieve top tier service standards at very keen pricing levels.