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Borrowing money, no job but selling house

(10 Posts)
Jan49 Sat 17-Aug-13 22:10:25

This question is for a friend. Is it possible to borrow £10K - £20K when you have no job but have a house that you’re selling so you basically want to borrow for living expenses and pay back when the house is sold? How do you do it? Credit card? Other loan? She has a good credit record.

WeAreEternal Sat 17-Aug-13 22:35:35

How would they plan to make the repayments?

The only thing I could think of is remortgaging the house, but I doubt they will get a mortgage or be granted a remortgage if they are unemployed and unable to make the monthly repayments.

I think the best thing they can do is get a job.

holidaybug Sat 17-Aug-13 22:37:19

There are bridging loans - the bank may offer one if it is secured against the house. Not sure.

Jan49 Sat 17-Aug-13 22:41:48

The plan would be to pay back a lump sum when the house is sold, using the proceeds from the sale.

Mum2Fergus Sat 17-Aug-13 22:59:10

I don't know of any lender who will wait for house to sell before getting their money back, so monthly repayments will have to be met. What if house doesn't sell...

WeAreEternal Sun 18-Aug-13 07:30:37

Bridging loans are very expensive, and are designed to help when buying a house before the mortgage is sorted out, so I don't know if your friend would even be eligible.
They also still require monthly repayments.

As far as I know there is no such loan that will give you £10-20k with no repayments until the house is sold.

It might be possible to take out a loan of that description once they have a buyer and contracts have been exchanged etc, but not before then.

The only thing I can think of, other than just getting a job or renting the propert out, is to release the equity in the house by selling to one of those equity release firms.
Your friend could then have the option to continue to live in the property by paying them rent.

Jan49 Sun 18-Aug-13 12:21:10

Thanks everyone. It's strange. Surely there's got to be a way of borrowing money to repay at a fixed time rather than monthly, in circumstances where it's a fairly safe bet due to having a house to sell and which is on the market?

WeAreEternal Sun 18-Aug-13 14:13:57

It's not a safe bet though is it.

There is no way to know how long it will take to sell.
The person has no income, no way to make any mortgage or bill payments, which makes it highly likely that the house may end up being repossessed or at the very least they will end up in a large amount of debt.

It could also not sell, or sell for much less than valued, even with negative equity.

Jan49 Sun 18-Aug-13 17:54:54

I see what you mean, WeareEternal, but I think the only risk is the house taking a long time to sell. There's no mortgage and even if it sells at a low price, that would probably be around £380K + (it's worth £450K or so) and she wants to borrow £20K max.

dotnet Tue 20-Aug-13 10:08:04

£10 - £20k sounds like a lot to me for living expenses as a temporary measure. She should draw in her horns and live at the absolute minimum level she can? She should also take in a rent a room lodger, short term. Advertise the room as a stopgap let, with a warning that she might have to ask the lodger to move out earlier than planned.
As an example, - if she sets the rent a room rent at £300 a month (payable in advance) and expects to let it for three months, but then the person has to move out midway through the third month, she'd still have gained to the tune of £750 (£900 rent minus £150 given back to the lodger for the fortnight s/he vacated.)
I think this arrangement would all have to be done on trust; but there WILL be people out there who'd be happy with an insecure arrangement. Lots of people's lives are in flux and a good discussion about her and their situation could bring about a useful outcome.

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