Bridging finance?

mlz1413

Can they get an IO mortgage against current property or desired property? Then they can pay off when ready (ie 6-12 months time), I realise their ages are against this but their current equity should provide enough scope for offering security.

Can your company buy and then sell to them at the same price in a few months time? although they are related if you don't make a loss or profit would that be allowed?

Can they pay in full with their savings if they take a hit on the locked in rates? Would this actually be any more expensive than a bridging loan?

Conrad

This is way complex, but in esscence a remo of existing property will be by far the cheapest method.

A business loan to your company will need a business plan, at least 30% deposit and so on and none of us other than your Bank will know if they want to accept such a risk.

Bridging will cost and arm and a leg but is reasonably straightforward as long as you plan for the pitfalls - for example they want a defined and timed exit route usually and can imposes punitive costs where the time limit (typically 12 m is exceeded).

A buy to let in thier name is another option with a 30% deposit. No income needed and max age 85 but fees will be very large unless they take a highist rate.

No simple black and white answers - each method involves many differning criteria - fill in a fact find and email it me!! Better still your own broker will be back soon you say.

Conrad

PS - an non B2L remo will depend entirely on thier incomes and security has no over riding effect on this as a court would not readily grant a repo order where it was shown a bank leant on equity rather than income - jo public often dont know this point but its 100% correct - equity based lending is dead.

Jackinbox99

Thrugelmir wrote: »

Then I would ask. Why isn't the property ready to sell and the funds placed in accessible accounts. If the search has been on for 4 years. Not a criticism as don't know actual circumstances but an observation. As obviously there will lots of interest in the property and being able to move quickly is the key.

Thats a very good point actually. Im in a similar boat, but at least ive been getting my house ready to sell over the last few years and its 99% there.

Doozergirl

Thank you. I really appreciate the more informative answers and the ideas. It helps me build a picture.

The reason that the money is not available is that they are incredibly eccentric. They fight like cat and dog, refuse to move directly from one house to another because they don't want the hassle of it but then sit on a total of four properties between home and away. They had put a lot of money 'to one side' which they wanted accessible to buy their bungalow, however managed to invest it locked in, in a high risk commercial property investment fund (which bombed of course) when they insist they wanted just a 'bank account'. That would have held more than enough but now doesn't remotely cover it. And the properties they sit on, well we've been trying to get them to sell one of them since 2005 but we're the kids so what do we know... Now they decide to pull the finger out and it's us trying to find the means of getting the money and accommodating every last wish.

I will rue the day I got involved in this but there you go. They're family and despite being mad, they are lovely. The house is near us, walking distance God forbid, so we can be there for them; so I'd rather them buy this one than think they can look after themselves in the next few years miles across town.

Annisele

Doozergirl wrote: »

They had put a lot of money 'to one side' which they wanted accessible to buy their bungalow, however managed to invest it locked in, in a high risk commercial property investment fund (which bombed of course) when they insist they wanted just a 'bank account'. (

I appreciate you're talking about your parents' money and not your own, so you won't have full details - but do you know any more about how they 'managed' to stick all their money in a commercial property fund? It doesn't sound like the sort of thing they should have been advised to do with their house-buying money, so if they were persuaded/advised by a regulated firm it might be worth pursuing further.

So far as the idea of making your parents directors of your company is concerned, it might be worth running your idea by your accountant. My company law is pretty out-of-date, but companies used to end up with some pretty nasty tax penalties if you loaned more than about £5,000 to a director - I don't know if that's still the case, but it's worth checking out.

Doozergirl

Annisele wrote: »

I appreciate you're talking about your parents' money and not your own, so you won't have full details - but do you know any more about how they 'managed' to stick all their money in a commercial property fund? It doesn't sound like the sort of thing they should have been advised to do with their house-buying money, so if they were persuaded/advised by a regulated firm it might be worth pursuing further.

So far as the idea of making your parents directors of your company is concerned, it might be worth running your idea by your accountant. My company law is pretty out-of-date, but companies used to end up with some pretty nasty tax penalties if you loaned more than about £5,000 to a director - I don't know if that's still the case, but it's worth checking out.

Thank you. Yes my brother in law was supposed to be looking at commercial property thing. I know he had written to the IFA who had started their own investigation, not sure where it went from there.

Good point on the loan front - I guess it might count as a benefit in kind?

Thrugelmir

Annisele wrote: »

So far as the idea of making your parents directors of your company is concerned, it might be worth running your idea by your accountant. My company law is pretty out-of-date, but companies used to end up with some pretty nasty tax penalties if you loaned more than about £5,000 to a director - I don't know if that's still the case, but it's worth checking out.

This was amended in the Companies Act 2006. But never had the need to refer to the revised legislation so far...... So unsure as to what is or not is allowed.