Puff The Magic Wagon!

iTrader: (2)

Just put our house on the market but have found another that we really like/want. However, as we haven't yet sold ours, we're not in a strong position. There is another offer from people that have already sold theirs ( [img]images/smilies/mad.gif[/img] ).

So, whats the score with bridging loans? Max 6 months. ATM we're 150K short if we take out 100% on our present house. Anyone know any good sources/contacts?

Thanks

Puff The Magic Wagon!

iTrader: (2)

Alternatively, anyone lend us £150K secured at a reasonable (thats reasonable ) rate of interest?

NotoriousREV

Hang on, just checking down tha back of the sofa, I think I may £150k down there...

fast bloke

[mails 150k's to PTMW]

kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk

Puff The Magic Wagon!

iTrader: (2)

Get ya coats on muppets





Guess I asked for that but the 1st post is a genuine one. Notorious - should've charged you a grand more for the bike, then it'd only be 149K I wanted

fast bloke

If it can wait until Thursday I will mail you - Too pished tonight and tomorow I am going away (to get pished for several days )

ajm

PTMW - seen the replies to your thread so far (I have been looking for responses to the same Q) and I sympathise.... so I am going to reach outside my field of expertise and say this: from what I understand bridging loans are $$$$. 2 months ago I would have told you to tell them to stuff it, but now I am in the same boat as you, except I have a buyer, but his timescales are jeopardising my purchase. Have looked very quickly at bridging loans and from what I have seen they should be treated as a last resort, because you are opening yourself up to a world of pain if you don't shift your house quickl enough and for the amount you originally budgeted for.

MarkO

I agree. I looked into bridging loans when we were considering doing the move to Scotland without renting between selling down south and buying up North. However, without exception every single person I spoke to about it, from bank managers to IFAs, told me to steer clear.

Reasons given were: expense - bridging loans have a fearsome rate of interest and often quite pricey setup charges. Also, at the point we are in the economic cycle (housing market possibly about to slow right down) it's the worst time to be doing it - if you get lumbered with two houses and two loans it's a short drop into major problems.

In particular, if you're having trouble selling your house, but are considering using the bridging loan to buy your next property, that sounds dangerous to me. After all, where's the guarantee that you'll sell the first home any quicker (or at all) once the bridging loan's in place?

All I'd say is use it as an extreme last resort, and be very careful before you go ahead.

David Lock

I've bridged a couple of times when we found a house we wanted before we sold our own. I think I paid about 3% over the going standard mortgage rate and, in fact, at a time when rates were MUCH higher than they are today. Best way of losing weight I know

I just went and asked my bank manager. Very risky though especially if there is a cut off date. What would worry me now is if the market nosedived which would leave you in the s h i t both ends. Also bridge terms usually say you can't rent out the property even for a short term plus you have the worry of having an empty property hanging around. Have you looked into the second home mortgage option where I think you need about 15% cash to put down on the new place? Disclaimer - I am not qualified to give financial advice - this is just from my own experience. In our case we found the house we wanted and hated the thought of losing out and took a chance. David.

dharbige

Puff,

If you can afford to make the repayments, can't you take out a mortgage on the new place, without clearing the mortgage on the old place?

RussP

I sell houses for a living - i wouldn't advise ANYBODY to take a bridging loan - i've seen it end in tears too many times.

If you lose it, you lose it. Its better than potentially losing everything.

Russ

Puff The Magic Wagon!

iTrader: (2)

Situation now is...

Our bank will loan us the funds IF we use the money to pay off the mortgage with our current lender, then take out a mortgage with them, paying back the whatever when our house is sold. No term I don't think & its BoE base + 2.5% for the duration. We've got 3 figures + of equity atm, so I guess that helps. Banks are always expensive, any cheaper sources on the same sort deal?

Prehaps the two sets of people who are coming to look at our house might buy - prehaps not...

Dave T-S

James

I did it once in 1988, and the market crashed immediately on me leaving me with a £110,000 mortgage, a £130,000 bridging loan, and a house I was selling that dropped by £70k, but I was locked into the purchase at full price.

We did it again last year, but the numbers were just higher

I wouldn't recommend it for the weak hearted, and you have to factor in the worst case scenario ( i.e. market crash, job loss, serious illness or worse - or all three ).

If your salary multiples allow it, it is easiest just to buy the new place as well as your old place, which is basically what we did last year.

There are two kinds of bridge - closed bridge, where you have exchanged contracts on both sale and purchase, but you are completing later on your sale; or open bridge, where you haven't exchanged contracts on your sale, but have (want) to on your purchase.

Lenders do NOT like open bridges - many of them got severly burnt in the late 80's, and will not now touch them with a bargepole. Setup costs are very high, IIRC we were quoted a fee of £8000 just to set it up, then the interest on top.

If I haven't put you off, give me a call on 01440 730257 tomorrow to see if I can do a better job, or drop in if you are passing by

Eldar

The way the housing market is I'd think long and hard about borrowing big money at base +2.5%

You are gambling that the combined value of the houses is goint to rise at least as much as the interest you'll be paying. As usual with gambling, you have to able to afford to cover any losses you make.

Colin.