When it comes to working with property professionals, brokers know only too well that one eye is always on the next step of the process. Their client may be looking for a bridging loan to help secure a rundown property for example, but they will already be thinking about how they exit that deal, particularly if they plan to retain it as a buy-to-let property.
It’s a similar story with developers. Yes, their focus will initially be on securing planning consent and the development finance they need to get those units off the ground, but at the back of their mind they will also be thinking about what comes next in the development journey.
This is where brokers are such crucial allies, as they can help steer their clients towards lenders whose products not only make sense for that initial stage of the plan, but for the future as well.
We’ve spent a lot of time at LendInvest building a wide range of products that can work for clients at all of those various points of an investment, from bridging to development to development exit or buy to let. And it’s been clear that there can be all sorts of benefits to a broker and their client when you transition from one deal to another with the same lender.
The actual application process is much speedier, for example, since the lender likely already has all of the important information about the borrower and the property being lent against.
Of course, there will be times when circumstances have changed ‒ if the borrower has racked up a host of CCJs for example ‒ which can make things more complicated. Equally, any responsible lender will still want to run their checks to ensure that everything regarding the case is as it should be. Nevertheless, the application and underwriting process should almost always be smoother and more straightforward when you remain with the same lender.
There can be financial benefits to a product transition too. At LendInvest for example, borrowers who move from one product to another enjoy reduced professional fees, since the same professionals ‒ lawyers, valuers and the like ‒ are being used throughout. The relationship side of things shouldn’t be underestimated either. Having the same contacts in place for your bridging loan as you had for your development loan can make a real difference for a borrower and broker and the ultimate success of the project.
It’s one thing for a lender to offer these complimentary products, but quite another to actually make a product transition a seamless process however.
This is where experience and expertise can make all the difference. Brokers want to know that the lender they work with not only fully understands their products, but also how to handle that journey between loans in a joined-up way. That’s where building a team full of experienced professionals, who understand the need to communicate clearly, can pay dividends.
Brokers take all sorts of different factors into consideration when recommending a product to their clients. Yes, rate will always be crucial ‒ ultimately all borrowers want their brokers to help them find a competitive deal, whether they are a seasoned property investor or a first-time buyer looking to get onto the housing ladder.
But there are other considerations at play too, from how reliable the lender is at providing the requested funds, to how slick the process is. Lenders therefore have to rise to that challenge. It’s not enough for us to simply offer a wide range of deals which make product transitions possible. Having those products available can only be a starting point.
Instead, lenders have to keep raising their game, looking afresh at how we work and what benefits we can provide brokers and their clients to ensure they feel the full benefit of continuing that relationship, rather than moving elsewhere.
