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Original poster

Bridging Loan? Any other options?

36 replies

MsEmmelinePankhurst · 07/05/2023 14:05

Advice please!

We are selling our house (very desirable area!) and moving a little away away. Several reasons for this which I won't and can't go into here as they are very specific and outing!

We have found THE perfect house to buy, had offer accepted, survey done, paperwork almost complete etc etc. We need to move into this new house within the next 3 months - again, very specific and outing reasons.

We have had not one but two buyers pull out of purchasing our current house - the first one pulled out SEVEN WEEKS after we accepted their offer, and the second pulled out two weeks ago. We have had lots of viewings since but no more offers. Reasons for pulling out were spurious (basically, flakey buyers - no problems flagged with surveys etc).

We absolutely HAVE to move in the next 3 months, and we CANNOT lose the house we want to buy as it meets a very specific set of criteria that no other house currently for sale can meet in this location.

Our house will sell - as I said, desirable area, loads of interest, already had offers, bla bla bla - and if we have to drop the asking price a bit, we will. However, we need to finance the purchase of the new property in the meantime, as we now can't guarantee that we can tie up our sale and purchase time-wise. I've googled bridging loans and OMG the cost is astronomical! I've just seen monthly interest payments of over £3k on a £500k loan (which is what we would need). Plus we would still be paying our existing mortgage until we sold our house.

SO MNetters, any help/advice please - we need to borrow £500k for (presumably) 3-6 months, and will repay the full amount once our house sells. What are our options please? Do we just have to suck up the cost? Is there anything I haven't thought of?

Thank you in advance. I am so stressed by the whole process, I could have written an essay here about flaky lying buyers and lying estate agents but we would have been here all day ...

OP posts:

bedtimestories · 08/05/2023 12:20

When we were in a similar situation we changed our old house to a buy to let mortgage while we found buyers and continued to buy our new house. We got a few raised eyebrows from our mortgage broker when we cancelled the buy to let mortgage 😂. We were fortunate enough to be able to afford both mortgages

alpacamaraca · 08/05/2023 12:35

bedtimestories · 08/05/2023 12:20

This has potential if you have enough equity in your current property.

Emmagr1 · 08/05/2023 12:38

Release as much equity as you can from your property and take a buy to let mortgage. Once your house is sold you can port your mortgage to the new house.

IAteAllTheTomatoes · 08/05/2023 13:00

Are the mortgages on the existing property and the new mortgage with the same lender?

If they are and you had a signed contract, could you ask to moe the existing mortgage to interest only or 12 months?

EggInANest · 09/05/2023 09:41

Talk to a mortgage broker asap.

Not sure if it would be right for you but there is something called a ‘Let to Buy’ mortgage.

Changeychang · 09/05/2023 09:58

@Emmagr1

Can you explain how this would work please? Might be something I'd be interested in.

OP - maybe look at auctioning your house or a company that seals buyers in with a non refundable deposit (although have to sell at lower price).

Emmagr1 · 09/05/2023 11:11

Changeychang · 09/05/2023 09:58

@Emmagr1

Can you explain how this would work please? Might be something I'd be interested in.

OP - maybe look at auctioning your house or a company that seals buyers in with a non refundable deposit (although have to sell at lower price).

You should speak to a broker who can facilitate this. Just be mindful of initial fees i.e. set and prepayment. You would need to balance the costs with a short term bridging loan.

Mykindalife · 18/07/2023 19:49

OP, I just wondered what you ended up doing and how it worked out with the bridging loan? We’re in exact same position with buyer just pulling out and wanting to secure our onward with bridging loan but it is expensive and a risk.. love to hear your experience if you didn’t mind. Thanks :)

whirlyhead · 19/07/2023 16:50

Avoid bridging loans! They have high arrangement fees, high-interest payments, and if you repay late, default interest is horrendous. They are not a good idea unless you have a concrete exit strategy (which no one ever has) and can afford the ridiculous interest.

MovingandStressed · 22/07/2023 09:01

@Mykindalife @MsEmmelinePankhurst What did you both decide to do? I am also in exactly the same situation and not sure whether we have to walk away from the properties we are buying or try and bridge (costs are not ideal but the stress seems even worse). Would be so grateful to hear what you chose to do.

Mykindalife · 22/07/2023 17:02

MovingandStressed · 22/07/2023 09:01

We haven’t moved on much from my post as it’s only been a week or so for us. We’ve managed to buy ourselves a bit of time from our sellers so just hoping we get another buyer on ours soon. I have bridging options lined up - actually not as bad as I thought - but still want to avoid it if we can! I hope you can find another buyer fast but not so easy as we’re into the summer hols now..

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