DMC12

A friend of mine is buying a new house off of a small developer but has had some delays with his buyer. Now the developer has said he needs to complete by the end of the month or he will put the house back on the market (for £10k more). Realistically the buyer of his house won't be ready untill mid July.

He is going to have a word with the developer to see if he can come to some sort of arrangement, but in the mean time does anyone have any experience of bridging loans. Any info on where from, how much, how long, interest rates etc would be much appreciated.

Many thanks.

Steve.

David Lock

There was a thread on this some months ago. General advice from those in the money bus' (I am NOT) was NOOOOOOOOOOO. You can catch a heavy cold, the obvious horror being a slump in the market and your friend owning 2 houses. Your pal could always call the developers' bluff of course. Also investigate second home mortgages. Having said that I have bought two houses using bridging facilities (about 3% over base IIRC) and came out unscathed. Excellent way of losing weight though

ajm

I would avoid bridging loans. He will be completely at the mercy of his buyer as the penalties can be very high if the completion on his sale drags on. If there already issues afecting the sale then the chances of this are even higher.

I have just been through a similar experience - i.e. messed about by my buyer and the seller of the house I was buying threatening to put the house back on the market as they were emmigrating at a fixed date.

In the end I was forced to call the sellers bluff in the hope that they realised it would take longer to start from scratch than to persevere with me.

Fortunately they did wait for me and we finally exchanged!

boxst

Hello

I would avoid them like the plague. Until the contract on your new house is signed they may pull out, so you are not in a good position. Plus the interest rates are high.

The developer can put the property back on the market, current conditions are not such that it will be snapped up. So as long as your offer has been accepted and he will keep to that price it should be okay.

Steve.

chris singleton

Totally agree with what has been said above, avoid at all costs.

No house is worth it (ovbiously that's easy for me to say) and I know people who have financially ruined themselves.

Be honest with the developer and if he wants to put it back on the market then let him.

Chris

SHAGGYDOG

Had the same problem last year, looked at bridging loans but they are very expensive and no guarantee it'll be for the 'anticipated' term - very scary.

In the end I got a buy-to-let mortgage on the house I owned (interest only) and another mortage on the new house. I raised the deposit I needed for the new house (20%) against the old house which you can do subject to equity/loan to value etc.

In the event, even though I did not sell the old house quite as quickly as I'd hoped (scooby had to go, yikes), I still saved £000's of pounds.

You just can't tell in this market what will happen. Calculated risk.

Still means you have a huge mortage for hopefully a short term but looking back well worth it, especially as I now have another Scooby.

Good luck ...

fast bloke

DMC - talk to a mortgage advisor - as with Shaggy dog, there should be a good solution without resorting to a bridging loan. BTL usually factors in there somewhere...