Investment - Bridging Loan

Discussion in 'Other financial issues' started by Honeymelon, Mar 12, 2018.

  1. Honeymelon

    Honeymelon Registered User

    Posts:
    5
    Following a recent family bereavement a family member wishes to buy the family home.

    To fund the purchase we were hoping to use funds which were in a Pension Fund. On examination of this option, it appears that it is not possible to purchase an asset which you have an interest in from your pension fund.

    Another option is to use funds which are currently in a Performance Tracker account. This is due to mature in 2019 and the terms and conditions specifically state that you cannot draw down the funds early. We have contacted the Financial Institution who have confirmed that there is no option to withdraw these funds prior to the Maturity date even with a penalty.

    We have approached one of the main Banks to query if it is possible to obtain a loan with the Tracker account as security. The bank has advised that this would be a form of a Bridging loan which are no longer available and the only option is a Buy to let option. We feel it would be difficult to qualify for such a loan.

    My question is, are there any other institutions where you could avail of a loan with the security of the Performance Tracker amount for a period of approximately one year?

    Many thanks
     
  2. cremeegg

    cremeegg Frequent Poster

    Posts:
    2,385
    It would not be unusual for a property sale from a deceased persons estate to take more than a year to take place.
     
  3. Gordon Gekko

    Gordon Gekko Frequent Poster

    Posts:
    2,963
    Would the other beneficaries not finance it by just leaving the proceeds outstanding for the relevant period?

    They could even charge an appropriate rate of interest.
     
  4. Brendan Burgess

    Brendan Burgess Founder

    Posts:
    35,278
    It looks like Gordon's solution is the cleanest.

    You should provide more information such as the value of the estate, the value of the property and who is entitled to share in it so that you can get a more meaningful answer.

    Brendan
     
  5. RedOnion

    RedOnion Frequent Poster

    Posts:
    1,561
    If the suggestions above don't work in this specific case, and the sale must be completed, can you provide more info in relation to the person wanting to buy the house:
    Do they already own their own property? And if yes, is there still a mortgage?
    Values of:
    Their own home
    Outstanding mortgage
    Value of house they want to buy
    What deposit they can provide towards it, and what their 'share' of the inheritance from house is, if applicable.
    In relation to the investment bond: was it issued by a bank, and is it capital guaranteed?
     
  6. Honeymelon

    Honeymelon Registered User

    Posts:
    5
    Many thanks for the responses.
    The home will be of the value of €100k split equally between a family of 8.
    Unfortunately none of the other family members are in a position to fund the purchase and some are in need of the funds from the sale.

    As regards the purchaser, they already have a mortgage on an investment property and do not believe they would qualify for another mortgage on an 'investment property'. They do not have a mortgage on their own PPR.

    Many thanks
     
  7. Brendan Burgess

    Brendan Burgess Founder

    Posts:
    35,278
    Try Pepper.

    They might well give a loan secured on the family home for such a purchase.

    If there are 7 people getting €12,500 each, do they all need it immediately? If only three of them want it, then maybe borrow only €38k and pay the others when the investment matures.

    Brendan