Bridging loans are an excellent tool for property investors and developers, but mistakes in the application process can cause delays or even rejection. Here are some common pitfalls to avoid.
Mistake 1: No Clear Exit Strategy
Lenders need assurance that you can repay the loan. Common exit strategies include:
Selling the property.
Refinancing with a long-term mortgage.
Using business cash flow.
Mistake 2: Underestimating Costs
Borrowers often overlook additional costs such as:
Arrangement and legal fees.
Valuation charges.
Interest payments.
Mistake 3: Choosing the Wrong Lender
Not all bridging finance providers offer the same flexibility. Look for:
A lender with quick approvals (24-48 hours).
Competitive rates to ensure affordability.
Experience in niche financing needs (such as auction purchases or development loans).
By avoiding these mistakes and working with an expert lender like Castle Loch Finance, you can secure the right financing solution for your project.
