The checks that are carried out by bridging loan companies
Each lender will have their own specific criteria and it is important to note that they will consider applications slightly differently from each other. For example, some lenders are unregulated and as such will not offer Financial Conduct Authority (FCA) regulated bridging loans. But there are certain checks that all lenders will do. Please read on to get an idea of what these checks are:
Security:
This is usually the lender’s priority concern as it goes some way to guaranteeing the money they loan out should things go wrong. They will want to see that the security you put forward matched their requirements. Each lender will have their own specific requirements such as insisting on a type of security being offered i.e. residential property or increasing interest rate charges if a property is in a state of disrepair.
Credit History and affordability:
This is of concern to some lenders. But all lenders will check your credit history before agreeing to provide a loan. Lenders will also conduct bankruptcy checks.
An affordability check may be requested in certain circumstances. This is usually requested where monthly interest is being paid each month or where the loan is regulated under the FCA.
ID Checks:
The lender will always require proof of your identity and will usually request the following:
- A certified copy of your passport or driving licence
- A certified copy of a recent utility bill (within the last 3 months is considered recent) or other form of proof of address
Loan to Value:
This is important to the lender as they would like to ensure that they do not lend more than they should against the value of the property. Once the application is fully submitted, the lender will obtain a formal valuation of the property by a Royal Institution of Chartered Surveyors (RICS) registered surveyor.
Exit route check:
The lender will consider the plan you put forward regarding an exit route to ensure that it is viable.
Legal checks:
The lender will have their own Solicitor to conduct independent legal checks. Once they are happy with the legal checks, the loan will be released to you.
How can we help you and why choose Finbud to help you with your bridging loan?
A Step –by- Step Guide to the process for securing a bridging loan at Finbud:
- 1) Contact us for a no obligation consultation on bridging loans and your requirements and needs with one of our experts who all have a breadth of experience arranging bridging loans. Finbud will take an initial enquiry from you and then obtain the best and most bespoke bridging loan offer to suit your circumstances. We offer free advice.
- 2) Once you are happy to proceed, we will send out a decision in principle within a couple of hours providing you with the best bridging loans available for you, their terms including fees and charges.
- 3) If you decide to proceed, then we will start the application with the lender. A valuation will be arranged if this is necessary and the legal process started. The majority of loans require a valuation on the security property.
- 4) Once completed, you will have the benefit of your bridging loan and can complete your property transaction/ refinance. This can sometimes be alternatively referred to as drawdown, completion or payout.
We will ensure that we take you through the stages step by step until completion making use of the wide access we have to all of the top bridging loan providers on the market. Our expert and specialist advice in this area will ensure that you will feel confident about the choice of bridging loan you take.
Not only that, but we will ensure that we will negotiate rates and ensure that you get as low an interest rate charge and lender arrangement fee as possible. Other aspects of the negotiation include discussing the security offered, maximum loan, legal issues and any changes which result from the valuation report. We will work to get your application through.
A bridging loan can be complex and so it really is essential that you have expert advice and guidance throughout the process which is something Finbud can do with its breadth of experience in these matters.
