Using an experienced broker in above circumstances can have major advantages, in ensuring that costs and right lender balance is maintained. For example not all bridging lenders offer development finance, however in a small scheme with a short development period it could be more cost effective to stay with same lender, even if interest rate is higher, due to savings on valuation, legal and lenders fees.

Bridging loans can come into their own for auction purchases. Lenders have ability to act extremely quickly, so time constraints posed at auction are not a problem. Indeed a 14 day completion is becoming quite common and provides luxury of knowing that you can bid safely at auction, knowing that funds will be available on time and just as importantly with minimum amount of fuss.

Costs despite Negative Returns:

Investors must pay sales charges, annual fees, and other expenses regardless of how fund performs. And, depending on timing of their investment, investors may also have to pay taxes on any capital gains distribution they receive - even if fund went on to perform poorly after they bought shares.

Lack of Control:

Investors typically cannot ascertain exact make-up of a fund's portfolio at any given time, nor can they directly influence which securities fund manager buys and sells or timing of those trades.

Price Uncertainty:

With an individual stock, you can obtain real-time (or close to real-time) pricing information with relative ease by checking financial websites or by calling your broker. You can also monitor how a stock's price changes from hour to hour - or even second to second. By contrast, with a mutual fund, price at which you purchase or redeem shares will typically depend on fund's net asset value, which fund might not calculate until many hours after you've placed your order.

Making any sort of investment involved a certain amount of risk so it is always wise to seek advice of a professional before making any decisions.

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