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bridging loans advice please

(12 Posts)
nailpolish Thu 14-Apr-05 08:46:51

think we might have to get a bridging loan, moving house in may.

has anyone else ever had to do this?

im phoning alliance and leicester at 9am

TIA

nailpolish Thu 14-Apr-05 09:58:24

bump

Gomez Thu 14-Apr-05 10:20:58

We bridged with the Royal a few years ago - although neither of us banked with them nor held a mortage with them, so try high street lenders as well as specialists. Also ask if you can bridge on the difference only - i.e. your deposit - and hold two mortgages for a short period of time. Arrangement fees can be steep - in the region of £500 - £1000 Check when payment is due - if short time period some allow interest to accrue and payment made at end. In most cases you will need to have completed missives on both sale and purchase - can be v. difficult to arrange open-ended bridging. Ask away if any other?s

nailpolish Thu 14-Apr-05 10:28:37

itll be for 4 weeks - we had arranged for the buyer of our existing house to move in 17th june as we thought our new build would be ready then - now the builder is saying the house will be ready May 20th and its in the contract that we have to move in on the date he gives us (or we have 7 days to move in, therefore May 27th i suppose)

i think the buyer has arranged everything for June 17th (domino effect of everyone else down the line causing the usual probs) so she is not wanting to do it 4 wks early

our deposit for the house is a third of the price, so we only have to pay the builder 2/3 of the actual price of the house, but we cant get the deposit until we get the money for this house on june 17th so the loan will have to be for the full price of the house

is htis how it works?

give the builder his money for the new house from a bridging loan

pay 2 mortgages for 4 wks

pay the interest on the bridging loan on june 17th, and get the money for existing house, pay alliance and leicester money for new house

this is so complicated and BORING (sorry)

Gomez Thu 14-Apr-05 10:37:14

I will use random numbers to show you:

Buying for 100,000 - deposit 25,000
Old mortgage 50,000 new mortage 75,000

on 27th May bridging loan for 25,000
draw down new mortage 75,000 -
Pay builder 100,000

from 27th May to 17th June you then have loan for 25,000 new mortage and old mortage.

Get proceeds from sale on 17th June and pay off loan plus interest and old mortage.

Not all lenders will allow you to hold two mortages in which case you may need to do the following:

27th May - bridging loan for 75,000 which is 50,000 for old mortgage and 25,000 for deposit and also draw down new mortage of 75,000 so you the have 100,000 to pay builder

Have you asked builder if they can wait until 17th June as originally planned?

nailpolish Thu 14-Apr-05 10:42:08

yes weve asked them - they obviously want their money, it IS in the contract, but we asked anyway

thanks for the info, i only knew about the 2nd bit where you have to borrow the whole amount (IE 75,000 in your figures above)

alliance and leicester (our mortgage lenders) dont do bridging loans so im going to have to shop around

thanks again

sweetkitty Thu 14-Apr-05 10:43:11

I'm interested in this as well nailpolish as I'm pulling my hair out over our housemove.

Had offer accepted on this house in January first time buyer wanted to move in 5-6 weeks so after about 3 weeks we found a house we loved in Scotland. Our buyer took 6 weeks to arrange his survey with his lender so that stalled things (house still on market though loads of viewers no interest) he came back round with 6 of his family saying how dissappointed he was not moving in in the 6 weeks and he was still really keen and desperate to move in. That was 3 weeks ago now I have found out the sale is stalling because he hasn't paid for his searches so his solicitor won't go ahead.

Scotland side of things is going really well mortgage is in place we just need to sell this place to release the funds. We have his mobile number and I spoke to him last week and he said he would contact his solicitor tried calling him yesterday left a message but he hasn't called back.

To make things worse DP starts his new job in Scotland beginning of next month so he will be up there spending £100 a week on commuting and DD and I will be down here by ourselves.

Sorry to hijack your thread nailpolish but just wanted to know if anyone else has been in a similar situation?

LeahE Thu 14-Apr-05 10:52:11

We had a similar situation when we moved last -- we ended up putting the deposit on credit cards (!) for a couple of months (DH happened to be being sent a whole bunch of guaranteed acceptance 0% interest for 6 months forms from different companies around then, so we split it between them and didn't have to pay interest. The deposit was only 5% in our case, though. And then we ran both mortgages for a month which was painful but we just about managed while staying within our overdraft limit.

Not sure I'd exactly recommend that as a strategy...

(Am still annoyed several years later as we accepted a fairly low offer from our buyers specifically because they'd said they could complete really quickly and then they messed us around and didn't complete until a month after we'd moved. Grrrrrrr.)

nailpolish Thu 14-Apr-05 10:54:12

sweetkitty that is totally out of order

since they are 1st time buyers there is absolutely no excuse for all of this

i hope you get it sorted soon

make daily phone calls, hassle hassle hassle the sols (you pay them enough) to get it sorted

and you can come here and moan as much as you like!

nailpolish Thu 14-Apr-05 10:56:20

leah i would do that but i think dh would rather poke his own eyes out first - he is very boringly careful with money!

its so unfair is nt it? im sure the whole process could be made much simpler fgs

Gomez Thu 14-Apr-05 10:56:56

Oh good I am getting all scared again - we are due to move end of May and currently got fingers crossed all okay...

sweetkitty Thu 14-Apr-05 11:07:57

I'm scared to go down the bridging loan route as you hear such bad stories about them. Another problem is that I am giving up work so we are downsizing in effect so we don't have my income anymore. Running 2 mortgages would be more than painful!

Leah I have thought about that we have a deposit of 15K to pay though don't know if we could stretch that on our cards. Our situation is the same as yours we accepted a low offer as he said he could move in 5-6 weeks. He was the one asking us how quickly we could move out and we had arranged temp accommodation in Scotland for us all!

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