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When it comes to bridging finance, Martin Lewis and his website MoneySavingExpert don’t suggest any particular lenders to use. They instead provide the information needed to make a well-informed decision on what is best for you as a borrower. Using this advice could be the game-changer to a successful short-term funding solution rather than a costly oversight.
Martin Lewis’ advice on bridging loans has a lot of clarity behind it. Bridging can be a high-stakes financial product that needs to be treated accordingly to that manner. MoneySavingExpert stress that there are a few key things to be mindful of:
- They are secured on property, which means your home will be up for seizure if you fail to keep up your end.
- Costs can escalate in quick time, and the combination of interest and fees can be daunting.
- These are short-term finance products, leaving very little time to recover in the event of delays or problems.
- It is also imperative to have a plan in place to pay off the borrowed monies.
The guidance given by Martin Lewis is not there to scare people into action; it’s about adapting a plain, practical sense approach as a means to educating ourselves better. Any financial product requires precision thinking, meticulous planning, and strong lender backing.
This is where the lender you choose comes in.
What it means when picking a bridging loan lender
Following the line of thinking put forward by Martin Lewis, the focus shifts from “who is cheapest?” to “who is safest and most transparent?”
Here is how Goldhill Finance stacks up against the above ideas.
1. Total cost clarity (not just headline rate)
The first advice given is to “watch out beyond the stated rate of interest.”
In the case of a bridging loan, the cost could include the following:
- Arrangement fees
- Legal fees
- Exit fees
- Monthly or rolled-up interest
The ideal lender will be the one that will clearly state the total cost of borrowing, as opposed to hiding it in the fine print.
First and foremost, Goldhill Finance is committed to transparency. Borrowers know exactly what they are getting into, before they start.
2. Responsible lending (fast, but planned properly)
The first and most commonly stated advantage of bridging finance is speed. While speed is a significant advantage, it can increase the level of risk if it is pursued in isolation. This is where the Martin Lewis ethos differs, where speed and efficiency are only pursued if they are transparent and responsible.
The right lender will offer a balance of:
- Efficiency
- Due diligence
- Suitability
Goldhill Finance offers a responsible approach to lending, where speed and efficiency are offered in the following ways:
- Decisions in as little as 2 hours
- Desktop valuations are used to speed up the process
- Funds are available in as little as 48 hours after approval
3. A clear exit plan in sight
If there was one rule that really mattered, it would be this:
A bridging loan should never be pursued without a clear means to repay it.
The means to repay it could be:
- Selling the property
- Refinancing to a longer mortgage
- Any other defined source of funds
The issue arises when there is a lack of clarity in the exit plans or when they are overly optimistic.
Exit plans are not taken lightly by Goldhill Finance, and are closely evaluated as part of the process.
4. Specialist knowledge (and experience)
Bridging finance isn’t a standard product. It usually involves working with:
- Complicated property situations
- Tight timeframes
- Unusual borrower situations
A typical ‘loan’ lender may not see the intricacy of the deal, but specialist bridging providers have a better understanding of what works in the real world.
The key for us as a specialist lender is to understand the intricacy of each case.
5. Risk awareness (Not over-promotion)
At MoneySavingExpert, honesty in matters of risk is at the core of their values.
This means being transparent about:
- Bridging loans aren’t suitable for everyone
- Bridging loans should have a specific purpose or aim
- Cutting corners on planning can lead to serious financial problems
Being transparent in this manner helps create trust, and everyone benefits from this.
Goldhill uphold these values and are transparent in our use of bridging finance, rather than over-promoting it as a quick fix.
A smarter approach to bridging finance
The basic concept, as derived from our examination of bridging finance from the Martin Lewis perspective, is as follows:
Bridging finance should be considered, not shunned.
If used effectively, bridging finance can be a very successful option. However, the success of bridging finance does, in a large degree, depend upon the way in which the loan itself has been arranged and by whom.
Goldhill Finance is predicated upon the very principles that guide responsible consumer advice and guidance, as follows:
- Transparency
- Responsibility
- Practical know-how
- Speed, but only in a way that does not compromise on substance
The distinction here, in a financial environment where speed appears to outweigh substance, is significant.
Final thought
If one follows the very same approach that Martin Lewis advocates, we can definitely make a much smarter decision and avoid unnecessary pitfalls or risk.
When it comes to bridging finance, choosing a lender that embodies speed, transparency, and exit planning in a responsible and informed way is the safest way to get the best product, and the best support along the way. It is important to note that Martin Lewis and MoneySavingExpert do not directly or indirectly endorse any bridging finance lender, including Goldhill Finance.