CML: Bridging loans “useful” despite reputation
October 17, 2007 by admin
Filed under News, News-Loans
Despite their bad reputation, bridging loans remain the “obvious choice”, said the Council of Mortgage Lenders (CML) today.
Loans used to cover the period between buying a new property and selling your old one are not well respected due to their expensive entry and exit fees and high interest rates.
However, a spokesperson for CML explained that, while they do not offer long term solutions, bridging loans are the “main and obvious route where there is a mismatch”.
She added: “Because bridging is an expensive form of property finance, it is ideally the case that the borrower and the finance company should have a clear view as to what the exit strategy from that bridging finance deal is.
“It shouldn’t necessarily be seen as a long term solution to any property-related transaction.”
Additionally, she warned that entering this type of agreement “does not make any sense” for people who do not know what their “subsequent rollover strategy” will be.
The CML is the trade body for mortgage lenders. Members make up 98 per cent of total mortgage lending in Britain.
