Bridging Loan

[Simster]

Anyone used one of these? What are your experiences of them? Are they easy to be approved? Are they a waste of money?

We've found "the house of our dreams" that might need work on it but seems like a good deal. The trouble is that we haven't yet had an offer on our house to make the whole thing affordable, and someone else has come in with an offer, albeit lower than what we would be prepared to offer.

Dunno whether the bridging loan route is the best route to take?

 

[Brixton Seagull 2]

A few years back I ducked out of one at the very last minute. They can be totally risky. If something goes wrong with the sale of your place, you could be stuck with two loans for a long time, especially in a buyers market which there is currently. It took a long while to approve too. My bank manager at Natwest was personally involved in sorting it out and there was a lot of paperwork. Also, I remember the interest rate being pretty steep (as it's seen as a short-term loan).

 

[WATF0RD ZERO]

Haven't had much to do with these for a good number of years, but my understanding (and use of them) was that they were originally designed to be used for a few days, maybe weeks to cover movements of funds. Definitely wouldn't use one where there is any possibility of it being open-ended, with no specific term.

 

[Tricky Dicky]

I'm just trying to arrange one this week to help out while I get a proper loan sorted which will take a couple of weeks more I believe, and I'm on a tight timescale. Not sure of the details yet or what it will cost me but I hope to find out today.

 

[PILTDOWN MAN]

firstly it can be expensive to keep up ie 2 loans for an indefinate period but also remember that once you have sold your existing property and wish to pay off your bridging loan this will cost you solicitors fees all over again. a very expensive exercise all round. certainly go in with your eyes open and dont become sucked in by your heart!!!

 

[Parson Henry]

firstly it can be expensive to keep up ie 2 loans for an indefinate period but also remember that once you have sold your existing property and wish to pay off your bridging loan this will cost you solicitors fees all over again. a very expensive exercise all round. certainly go in with your eyes open and dont become sucked in by your heart!!!

Dont do it unless you have money to burn to pay the interest.

PM (Ex-Bank Manager)

 

[ditchy]

cant u put a higher offer in for the property subject to selling yours... have the sellers got somewhere or is it a vacant property ?

 

[Hiney]

If you haven't had an offer on your existing property, you would be talking about an open-ended Bridging Loan, meaning it could go indefinately if you don't sell your house - the cost of this could be astronomical and many lenders wont touch it.

If you had exchanged contracts on both properties but the completion dates overlapped, this is a 'closed' bridge and would usually only be for a short period of time - not as expensive, with a definate date for repayment.

My advice is don't do it if you haven't got a buyer for your current property. It's not worth the potential grief.

 

[Simster]

Cheers chaps.

Hopefully *crosses fingers* it shouldn't be an issue anyway because we *might* get an offer on our place imminently...

 

[Stumpy Tim]

Where are you moving to then Sim?

 

[Man of Harveys]

Cheers chaps.

Hopefully *crosses fingers* it shouldn't be an issue anyway because we *might* get an offer on our place imminently...

It's weird and obvious I suppose - you can pore over a mountain of newspaper property sections for weeks until you consider yourself a virtual guru of estate agency - but until someone actually makes that first offer, you really have no solid idea what it's actually worth. It may just be worth sitting tight until then. Just my tuppence worth.

Actually, I chronically fancied the fit bird that put in the first offer on my place - me and her, admiring the view from the front bedroom...with my reputation?