Bridging Loan

delmar39

Hi there

We're in the process of selling our house and have put a deposit on a new build, which has secured us exclusivity to it for six months (until March 2010). So, we have to sell ours before this deadline date or we're in danger of losing the deposit and the new house as it will go on the open market.

We're very keen to secure the new house so I'm looking for contingencies in the event that we don't sell in time. This may mean taking out a bridging loan, but I don't know how this works or whether or not the companys giving them out are all legitimate. Does anyone have any information on this?

Clearly we may sell the house and therefore we won't need to go down this route, but we want to secure the new place so we need to look at all options just in case. However, I don't want to do something that will put us in a negative situation finance wise as it's not worth it.

Advice welcome.

Thanks

Rafter

delmar,

As house prices are forecast to be flat at best, the key thing is marketing your current house and accepting any sensible offer you get. Bridging finance can be very expensive and also hard to get when property prices are falling.

Worth finding out if the developer has any part exchange deal too?

Good luck

R.

delmar39

Thanks for this Rafter. Makes sense to do what you mention. I think our house is priced too high at the moment so need to consider lowering. It's a small local developer that's building our new place so not sure whether they will entertain a part ex but now you mention it it's worth a try if we don't sell in time. That way they know we're doing all that we can to secure the new house. Thanks again.

jen_a_c

It might be worth approaching your own bank to see if they can help.

I used to work as a Premium Manager for a major high st bank and did a few bridging loans in my time, referred from the local branch network. Whilst the branch staff themselves might not be able to do it, they may be able to refer you to another part of the bank who can. Make sure you make clear what you want though, so you don't get sold an inappropriate product.

Good luck.

delmar39

Thanks for this. It's still early days but all these things are good to have up my sleeve. Keep you posted!