Bridging loan?

[CatsRuleMyLife]

This is a hypothetical question at the moment, as I haven't found somewhere to buy.

As my property is on the market and is now getting some viewings, and I have no mortgage, would it be advisable to look for a bridging loan so I can move sooner instead of wait for my sale to go through? I'm considering properties that are about two thirds of the value of my place so the interest would easily be covered.

Not sure yet whether I'd go down this route or whether it's even a good idea - anyone got any thoughts/want to put me off?

Could look into a mortgage with no early redemption fee (usually a tracker). Might be cheaper than a bridging loan?

No. There is too much potential for your sale to fall through.

We did exactly this, took out a loan for (in the end) about 4 months to cover the shortfall costs like removal vans, wondow certificates etc.
It cost about £300 in early repayment fees. It was worth every penny and I'd absolutely do it again. It made it all so very much easier.

A big no from me. We had trouble selling a house and got a bridging loan to buy the new house while the other one went through. Hands down the most stressful period of my life, we ended up down to the wire to repay it and it cost us thousands in inflated payments. Never again! 😬

It would be much cheaper and less stressful to just wait. Viewings may not translate into offers that you want to accept. Or even may not appear - as the market is pretty difficult and could get worse. Once you have the repayments of a bridging loan to worry about you may feel pressured to accept less for your current home than you expect. Also if things dont go at your expected timeline with a buyer (or even fall appart and you need to start the sale again from scratch) you would have two properties to pay running costs on, plus the loan stress.
You also mention that you would be using equity to cover the interest which suggests you cant cover it with your current income ? That could put you in a difficult position.
What's the reason for the downsize? Are you elderly or having illness issues that mean you need a different layout?. Or is it about reducing living costs, changing area ?
Downsizing in a falling market caused by a national affordability issue (as we have now) is not generally the savy way to do things.

Bridging loans in the traditional sense are very difficult to get nowadays

No way would I ever take out a bridging loan.

It's just putting a lot of financial worry and uncertainty on your shoulders.

I would just sell your house/buy another one in the normal way.

Bridging loans aren't cheap at all
Probably 2% arrangement, plus legals, and then probably 0.75% a month

Even on an average 300k house 3 months of thats going to cost you 15k plus

I agree. Hardly anyone takes out a bridging loan these days. Far too risky and costly.

Thanks, I've been in meetings all day so just catching up.

I'm moving from an expensive area to much cheaper, have done all the maths including what sort of pay I'd need when I get a job so am perfectly happy with that. There's only me, no family, nobody to inherit, nobody moving in with me. Won't be downsizing because it's a cheaper area anyway but I'm not in a massive place now.

I've got an offer today at just under asking price which I need to consider and will probably accept, so that's good.

As I said, it is hypothetical and judging by the replies I'm best avoiding a bridging loan. I suppose my thinking is, I want to avoid renting which would cost a lot (plus moving twice - nightmare!). I'll need to be patient and use the time to keep saving. Thanks all, you've been very helpful.

Unless you are confident your house will sell - then I really wouldn’t take the risk with a bridging loan.

Someone I know took one out to buy a new home last year as they had to relocate quite quickly - 12 months later and the house still hasn’t sold (and it’s in a relatively good shape and reasonably priced) - they’re now having to cut their losses and sell a ‘we buy any house’ scheme.

It’s whether you are prepared to take the risk!

You don"t know the value of your place until it actually sells, bridging loans are expensive, just sounds like a bad idea to me. Sell first, then see what you can afford to buy.