A recent roadshow for brokers found that some of the broker delegates were not aware that borrowers could get very low-interest rates on bridging finance.
There is fierce competition amongst bridging lenders and this has led some of them to cut interest rates to as low as 0.44% per month. According to Jo Breeden, managing director of Crystal Finance:
“The vast majority of brokers that don’t already utilise the bridging market are still under the misconception that bridging finance is a very expensive last resort, as such they do not fully understand the product and the low rates available.”
New lenders have entered the bridging market over the last year, and many of them try to attract business with low interest rates and other incentives.
The findings highlight the importance of borrowers using brokers that are experienced in bridging finance and who are up to date with the latest bridging products. Bridging finance is a specialist lending area. Not all mortgage brokers have expert knowledge on bridging finance, as the roadshow revealed.
Benson Hersch, the CEO of the Association of Short Term Lenders said at the roadshow that his organisation has forums that brokers can attend that promote knowledge and provide education about bridging finance. Other organisations hold seminars and workshops where lenders can talk to brokers about their services.
To raise public awareness about bridging finance, lenders suggest that there should be more press coverage of cases where bridging finance has successfully helped people complete deals.