Understanding the importance of Bridging lender's terms

Understanding the importance of Bridging lender's terms




How the lender's term enable you to find best short-term funding solutions for your clients, by John Maclean, Managing Director of Link Lending.

Link Lending has led innovation in the bridging loan market place by offering a transparent, fair and cost-effective solution - with no minimum loan terms, true daily interest, and no early repayment charges - for clients who are asset rich, time poor and cash poor.

Short term funding – the three key factors

There are three key client conditions that should make every broker “think bridging”:
• The client is asset rich – they have capital tied up in bricks and mortar
• The client is time poor – they need a solution very quickly to solve their particular problem
• The client is cash poor – they have no cash reserves to draw upon to bridge the gap between their urgent need for a cash solution and the future point when some of their assets can be turned into cash.

How Link Lending can help to resolve cases for brokers and their clients:

When clients fit the asset rich, time poor, cash poor model, Link Lending’s terms can provide a fast, problem-solving solution without the borrower incurring excessive costs and penalties. Here are a couple of examples.

Buy to let renovations and upgrades

A client owned a number of buy to let properties and lived in a mortgage free property worth around £500,000. In order to bring his BTL properties in line with stringent health and safety requirements and upgrade them to a higher standard to maximise their rental potential, he needed to raise £200,000. He needed the loan as soon as possible, to minimise rental loss while the properties remained empty. He planned to cover this expense by selling one or more of the rental properties once the improvements had been effected. This is an example of the cross over between owner occupation and properties being run as a business. The client can take advantage of the rise in overall property values to finance the property upgrades but, because it is a business, he can’t wait around for a remortgage deal to go through because every day the properties remained empty would cost him money. The solution was a short term bridging loan on the borrower’s own property, repaid as soon as one of the upgraded BTL properties was sold.

Bridging the gap between completion and long term mortgage advance

 

The client was expecting to receive funds from their long term lender on completion of their purchase of a new property scheduled in 48 hours. They then heard from the lender that some of the conditional requirements had not been fulfilled and the funds could not be paid on the completion date. In danger of losing their deposit and the purchase falling through altogether, the client needed very fast funds to complete the purchase. Link Lending was able to advance the funds needed, with no minimum loan term, no early repayment charges, and true daily interest charging.

 

Contact Link Lending on 0845 257 2444.
 

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