The Society of Mortgage Professionals has produced a good practice guide which includes advice for brokers regarding bridging loans.
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div>The guide contains three key recommendations for such loans:
1. clients must have a solid exit strategy in place to pay off the bridging loan
2. brokers must make sure their clients know the repayment date and ensure there is nothing on the horizon that could delay that payment
3. brokers should ensure all the paperwork and documentation the lender requires is sent as one package, rather than at different stages
David Thomas, chair at the Society of Mortgage Professionals, said: “There are many benefits to bridging loans, such as speedy application, a quick transfer of funds and broader lending criteria, but it is vital brokers understand the risks as well as the benefits of this product.”
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