How to borrow 300K?

bhd

Hi, new to the forum so please excuse any transgressions!

Situation is this - aged parent wants to move. Current house is owned outright, and valued at around 750k. The properties she is looking at go fast, so ideally she needs to have the cash available if/when they come on the market.

Can anyone advise on the best way to borrow against the equity in the current property, without going down the full equity release route?

Thanks in advance,
bhd.

LoopyPrune

I think you maybe be able to get a bridging loan. I know my brother in-law works as a builder and he purchase's houses like this all time. Look into that cause I think its all short term based lending secured against the property.

welshmoneylover

That's a heck of a sign LoopyPrune!

bhd

Thanks LoopyPrune - I presume I'll need to look around for this, or do you think there are specialist providers who deal with just this sort of situation?

Any pointers gratfully received!

bouncydog1

Cost of bridging loans is usually more expensive that mortgage. How will parent finance the cost of the bridging loan if the existing property has not been sold.

Best option IMO would be to get the existing property valued and put it on the market to sell and see what happens. In the current climate £750k is not a cheap property and you may find that there are a limited number of buyers with funds available and the property does not sell quickly.

If that is the case, then your parent would be better to wait and sell the existing property prior to buying another one. That way your parent will know exactly how much money is available to buy the new property and save, without having to pay hefty loan interest.

In the event that the house sells quickly could your parent move in with you temporarily until another property is found?

LoopyPrune

Yer Bouncy has a point. Turnaround in a 750k property is alot slower then your average house and bridging loans are high risk short term lending only used as a last resort. The fact she owns the first property outright works in her favour though as usually people have to finance 2 houses but she would only have to finance the 2nd. Does she have other collateral available? If not, I would say sell the first property, move to rented accommodation and then buy the 2nd property.

bhd

Hi both,
I take your points regarding both the expense, and the risk. We have already spoken to estate agents who assure us they have buyers ready and waiting (well they would, wouldn't they? ), but we are reasonably confident that it will sell, although how long it takes to complete is as always, anyone's guess. I can see the charges on a loan racking up at this point.

Have also considered the possibility of her selling and moving out first, but she's in her late eighties, and frankly the prospect of one move is daunting enough. Still, just kicking around a few ideas at the moment, so keep 'em coming!