We are also seeing situations where borrowers have perhaps assumed they will be able to put finance in place – perhaps for an off plan purchase, or for buying at an auction – and then realise that with a long term finance, the criteria is different. Lenders need bank statements, employment history etc. and all of a sudden, although the lender is prepared to lend, they can’t get it through in time.
This is often the situation at auction. The borrower knows they can get the finance in place with a traditional lender, and potentially have an agreement in principle, but until they have won the auction, nothing can be done. But then when that hammer goes down, the borrower is legally bound to buy the property. They have to pay the deposit there and then, and need to be able to provide the remaining funds within less than a month or they will lose their deposit.
In these cases, bridging is the perfect solution. The broker can come to us and agree heads of terms. Because of the timescales involved, we will accept short form valuation, and then if they get the place, they can call us and get the ball rolling.
We are really starting to build a reputation with these types of cases as brokers know that we can turn things around, whether it is foreign buyers purchasing a property off plan or helping a landlord secure a buy to let purchase at auction.