What’s available in 2013 for bridging loans, commercial mortgages and secured loans?
Despite last year seeing some big name bridging loan providers closing their doors there is an increasing number of lenders entering this market. With a growing number of lenders we can probably expect some lower rates and set up costs plus hopefully some more flexible lending criteria. If property values show strong positive signs of increase during 2013 then hopefully we can expect to see bridging loan LTVs also increase.
On a negative note with the prospect of increasing fraud attempts, there is the likelihood of more security measures being introduced by some of the bridging loan providers. One major lender introduced late last year the requirement for all customers to be interviewed by a representative in order to confirm their identification. Other lenders who have had any suspicions about applications have been known to request customers to visit them, or have sent representatives to the client, before payout. These extra measures may become a necessity in order to avoid becoming the targets of large frauds that could spell financial disaster to a bridging lender.
Hopefully this coming year will see the major high street banks increase their willingness to provide commercial mortgages and loans. As independent commercial finance brokers, we always look to find our customers the best possible deals for the commercial mortgages and loans that they require. However, when the high street banks will not provide the funds required, we do have an increasing number of facilities from alternative commercial mortgage providers. These alternative lenders offer more flexible underwriting and often higher loan to values than the high street banks. The interest rates are usually a little higher than those provided by the high street banks, but do provide an excellent alternative source for commercial mortgages.
The number of secured loans provided during the last 12 months has seen an increase when compared to the previous couple of years. This increase in expected to continue during 2013 for a number of reasons. New lenders entering this market in addition to previous secured loan providers returning to the market are helping to provide more competitive rates, higher loan to values and flexible underwriting that will take into consideration some adverse credit and a low credit score. With mortgages and remortgages being difficult to obtain and some old mortgage facilities charging much lower rates than can be obtained on any new facility available today, secured loans can be a very attractive alternative to a remortgage. This has been further helped by the recent introduction of secured loans facilities for amounts up to £250,000!