Long-term and short-term finance knowledge needed from brokers
Bridging finance is a useful and flexible form on lending, but not all brokers are able to provide expert advice on it. Lenders benefit from brokers who are experts in both long-term and short-term finance.
A January 2018 MortgageIntroducer.com article notes that in 2017, bridging lenders had a record year, providing loans worth over £3bn. This figure is around a nineteenth of the value of the residential mortgage market, which makes bridging an important but niche lending market.
According to Jonathan Sealey, writing for MortgageIntroducer.com, not many mortgage brokers are able to advise on and arrange bridging finance. He argues that advise is needed on all lending options to help borrowers make informed choices and provide them with a list of all available options.
There are situations where bridging finance is the best option, especially if funds are required quickly and borrowers can afford to repay the bridging loan within a short time. A long-term mortgage is not always the best solution to raising finance.
Many alternative bridging lenders will consider complex lending proposals that large banks will not handle because they do not fit into their narrow criteria of lending conditions. Sealey says that this has led to the perception that bridging finance lenders are prepared to take more risks. However, he believes this is not true and that lenders are risk aware. They take the time to asses a complex loan application in detail in order to form an accurate risk assessment.