Cheap bridging finance – first4commercial.com
Cheap bridging finance? Is it a myth?
Is there such a thing as cheap bridging finance? Bridging finance has a reputation for being a very expensive form of finance and as such a lot of people are put off using it. Here at first4commercial.com we try to give all customers and introducers the “full picture” when you look at the costs associated with bridging finance. Sometimes the headline rate is not always the main concern.
There are certain lenders who will offer great headline rates of 0.75% per month but these sort of rates are normally only available for low Loan To Value (LTV) transactions or for customers with good credit histories. Behind these headline rates can lurk some very expensive exit penalties, completion fees and legal fees to name a few. We will take a look at industry standard fees and what you could expect to pay*
Completion fees: These tend to be priced the same across the board, normally 2%. Some lenders will charge a minimum fee to cover smaller loan amounts of say £50k you could expect a fee of circa £1500.
Legal fees: These vary widely across the industry and can be as little as £500 up to several thousand depending on the loan amount and the different lenders
Valuation fees: These also vary greatly from lender to lender and are obviously in accordance with property values. Some brokers will try to add “hidden fees” to valuation fees to make more of a mark up on the prices.
Broker fees: Fees charged by brokers really do have large variations across the industry and I have heard of some brokers charging fees of several thousand pounds upfront before anything has been achieved. Here at first4commercial we charge a simple flat fee of 1% of the loan amount or £999 for loans below £100k. This way we know that everyone is treated the same across the board. Our fee is also negotiable for loans over £500k.
Exit penalties: Some lenders do not charge any exit fees. Typically one months interest is quite normal, however some lenders will insist on higher percentages or have a minimum interest charge of say three months.
first4commercial.com will try and find you the best product to suit your needs and will always try to deliver the cheapest rates and fees available on the market. We feel that sometimes if you need to guarantee completion in a set timescale then the difference of 0.25% per month to achieve this would be worth the sacrifice rather than incur large penalties from auction houses etc for over-running.
Cheap isn’t always best and a holistic approach to bridging finance is required to make sure you get what you need, which ultimately is your main goal. We believe that sometimes using a lender or product to save a few pounds can be a false economy as in the long run could costs you hundreds if not handled correctly.
*These fees are to be used for illustrative purposes only and each case is priced individually according to circumstances.
To find out more contact the team on 01277 620083 or use the contact form on the website.
T: 01277 620083 F: 01277 658900 E: email@example.com
Colchicums, The Vale, Stock, Ingatestone, Essex CM4 9PW