Rising standards help bridging loans bin their poor reputation

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There was a time when bridging loans were regarded with some suspicion by mortgage brokers and borrowers, but a February 2017 MortgageStrategy.co.uk article discusses how this has changed.

Today, for many people buying property, a bridging loan is their first choice for a quick short-term loan.

The Association of Short Term Lenders (ASTL) has a code of conduct that all its members must abide by, and this has raised the professional standards of bridging finance members. Many lenders now have solid relationships with brokers. Where once some brokers mistrusted bridging lenders, and advised their clients to use them as only a last resort, brokers now have confidence in bridging lenders and appreciate the flexibility that bridging loans provide.

There are many bridging lenders, and competition amongst them is fierce. This has benefited borrowers through low interest rates and fees.

The uses for bridging loans have widened over recent years. At one time, bridging loans were seen as a product that could only be used to quickly complete a house purchase in order to break a house buying chain. Nowadays, they are used for property auction purchases, to improve business cash flow, for redeveloping property and for businesses to purchase stock and equipment.

Bridging loans are flexible, with no exit fees and low interest rates, and are ideal for obtaining funds in a matter of days. A broker can advise on the best possible deal, and their advice is protected by the Financial Conduct Authority to ensure impartiality.

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