Lenders must say what they mean and mean what they say! And that includes not offering a silly low monthly rate to “hook” the borrower and then finding a reason to increase it.
To reinforce this message, Alternative Bridging Corporation Limited (“Alternative”) has introduced its Lord of The Rates programme at 0.675% per month for both residential and commercial first charge loans, including regulated loans, from £250,000 to £3M.
Alternative director, Jonathan Rubins, says “risk is either acceptable or not and if it is, why charge different rates for sub 50%, then 60% and then 70%, etc. etc. One simple low rate is all it needs for straightforward proposals, competitive at low LTVs and fantastic above”.
Alternative analysed its loan book and recognised that most loans are at between 60% and 70% LTV. It then chose a rate that worked well in this bracket and applied it to the rest of the book. The monthly rate only changes where there is adverse credit or the refinance of another bridging loan. In those cases, the rate is 10 Bps higher with a separate chart for loans over £3M.
The lender believes in keeping it simple and one rate for it all is a demonstration of this. Life is complicated enough, particularly with new entrants offering terms they can’t, and don’t intend to maintain. Why suffer lenders offering a great headline rate to attract attention, only to find, surprise, surprise, the valuation has come in low or there is some other reason to change the terms. Quote one low rate and stick to it.
Similarly, Alternative is truly comfortable with commercial bridging and asks why the borrower should be penalised with a higher rate for something they are enthusiastic to do? Alternative regularly lends to the property industry and business community secured on retail, office and industrial properties as well as student housing and serviced offices for both owner-occupiers and investors. Jonathan says “this new low rate works for us and is good for the borrower. It allows the brokers who introduce our loans to demonstrate they are providing the best terms to their clients. With brokers’ commission included, it is a win-win situation for everyone.
Alternative believes theirs is the way forward. Having been short-term lenders for the past 25 years, they know what brokers and borrowers want. First certainty of delivery, secondly no unexpected changes and third a low interest rate. They warn that when brokers and borrowers see terms which are too good to be true, ask questions, as that is what they are – too good to be true!
Based in Borehamwood with its directors, case managers and underwriters under one roof, decisions are made swiftly and simply and when the proposal needs creative structuring, Alternative will think outside the box and then efficiently transact and has a strong team of BDMs to spread the message. The Lord of The Rate programme is one more step towards making miracles be an everyday event. Yes, “One Low Rate to Rule Them All”.