Bridging loans?

TillyD

Registered User
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Just wondering what way do they work when you are buying a new home but haven't sold your own yet? I haven't a clue what way to go about this or even if it can be done.

any advice... Tilly.
 
Ask your bank / lender.

Some won't bridge unless the mortgage is already discharged (which is a pain), others will bridge but may require that some of the bridging is used to discharge any remaining mortgage. Most will provide open ended bridging only on a low loan to value (<50%), so if you're relying on the full value of your current house to complete the transaction it can be a problem. If you have the flexibility it's a great way to go - means you don't have the dual headache of house-selling and timing househunting and purchase to coincide, you're in a no-chain situation, and your offers won't be ignored because you don't have contracts signed. But if you need to realise all your equity for the new purchase up front, or are living in a slower-to-sell area, I'm afraid there's probably not much option but to bite the bullet, put your property on the market, and hope you can choreograph the whole transaction... Good luck.
 
We're already approved 250 for the house we want buy but we will be short 120,000 because this house hasn't sold. So do I get a bridging loan using this house (the one I haven't sold) and pay higher iunterest back on just the bridging loan?
 
We're already approved 250 for the house we want buy but we will be short 120,000 because this house hasn't sold. So do I get a bridging loan using this house (the one I haven't sold) and pay higher iunterest back on just the bridging loan?
Yes - the bridging, if you can get it, will be secured on your unsold "current" house. But these aren't really questions I can answer - you will have to talk to your bank or lender about possible bridging, and they'll have their own criteria. And have all the facts to hand - outstanding mortgage (if any), current valuation, amount needed, whether the house is on the market, etc. They may have flexibility to provide the financing, or some of the financing, in other ways (part unsecured personal loan, part higher initial mortgage value, something like that - depends on your circumstances) so do enquire about that too.
 
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