Advice Re...bridging Loan

woodstoke

Hi, wondering if anyone can give me some advice.....i have sold my property to a large nursing home company who are in the process of buying my house from me for £180,000, it is with solicitors at the moment being sorted out.....meanwhile a house has come up for auction in a couple of weeks for £150,000, the seller will take it out of auction if i complete before...........i really do not want to lose this property as its ideal, with disabled living for my daughter hence it would save me a £30,000 conversion.......in estate agents opinion its worth £230,000.......

now the question is should i go for a bridging loan for £150,00 if i can get one or should i just possibly lose the house......

what are the best deals on these types of loans too should i decide to go for it?

thanks in advance.....

Mutton_Geoff

I personally wouldn't take out bridging finance unless contracts were exchanged on your sale with a firm completion date set. You're opening yourself up to some serious risks if you do.

As for the new place, why not bid at auction? Or wait until after the auction when it hasn't reached reserve and you can put in an even cheekier offer? A slightly more risky strategy agreed, but nowhere near as much as a bridging loan in this market.

silvercar

Until your buyers have exchanged, nothing is guaranteed. If you took a bridging loan and then lost your buyer could you afford to keep going for 6 months?

Its all too risky, wait until your buyers exchange and then bid at auction.

GDB2222

It's simple. Tell your buyers to exchange within a week, as otherwise the deal's off.

PasturesNew

As the others have said. Also, have you checked out the cost of bridging? It might cost you £10k.

SouthCoast

It might cost you £10k.

It might cost you £100k if it is an open bridge!

Mutton_Geoff

Interest alone on the £150k plus the same on an unsold £180k house means you're costs would be in the region of £2,000 to £2,500 a month. If the old house doesn't sell for 18 months, can you afford the additional £36,000 to £45,000?

That's the potential downside of this plan.

macaque_2

woodstoke wrote: »

Hi, wondering if anyone can give me some advice.....i have sold my property to a large nursing home company who are in the process of buying my house from me for £180,000, it is with solicitors at the moment being sorted out.....meanwhile a house has come up for auction in a couple of weeks for £150,000, the seller will take it out of auction if i complete before...........i really do not want to lose this property as its ideal, with disabled living for my daughter hence it would save me a £30,000 conversion.......in estate agents opinion its worth £230,000.......

now the question is should i go for a bridging loan for £150,00 if i can get one or should i just possibly lose the house......

what are the best deals on these types of loans too should i decide to go for it?

thanks in advance.....

Your motives are good but don't even think about at the moment.

Lenders are getting increasingly dirty as their panic levels rise. If you do manage to find bridging finance, you could be hit with a swinging interest rate rise or face having the debt recalled without warning.

It is also worth realising that is probably not quite the bargain you might suppose. House prices are going out of date by the hour at the moment as credit and confidence collapse. Although there are plenty of properties for sale at pre-crash prices, they are not shifting. This property is being sold by an astute seller looking to minimise their losses.

When you have the money from your other house in your hot stickies, that is the time to make a decision.