Should I get a bridging loan?

jackkelly

Hi all posting here aswell as mortgage thread for some advice. We are FTB's part of a chain of 3, everything was going well til now!
Everything is in place mortgage, searches surveys etc but my husband is leaving the RAF on april 16th with a large payout which we will use for our deposit £45000. Now our vendors have been aware of our situation from the very 1st viewing and said fine, their vendors have decided they want everything done and completed by april 26th as they are leaving country retiring abroad..
There is no way we will be able to meet this date the MOD will not tell us when they will make the money available to my husband, all they say is within 20 working days of his leaving date. I have begged, pleaded, shouted at them but no joy.
We are worried about everything collapsing now so are considering a bridging loan for the deposit until the money from MOD comes thru.
Is this an option worth considering how much will it cost us, will anyone even give us one?
Should we just hold firm and hope that we are past the point of no return and it is in no ones best interest to pull out now so close to the end.
Many thanks all advice gratefully received

silvercar

If the MOD money is 100% guaranteed then I guess its a safe thing to do. I don't see why you should have to pay for the privilege of holding the chain together.

If you refused to arrange alternative finance what could your sellers do? They wouldn't be able to find someone else to complete in such a short timescale.

I wonder what your solicitor's view would be on exchanging before you actually have the money? He may be reluctant to let you do that in case the MOD delay further. You could exchange soon and agree to complete by end May if you are 100% sure the MOD payment will come in time. Personally I would prefer to have the money in my pocket or at least some alternative finance set up before exchange.

jackkelly

Hi the money is guaranteed, our solicitor is reluctant to exchange before we have it. would rather exchange and complete within a week once its here.
Its just holding our nerve as FTB's as we have been completely straight with everyone we have spoke to about our situation, and I don't see why we should financially be out of pocket because the the guy at the top wants to move sooner, and book flights out of the country etc.
Its just I'm answering the phone calls asking me when the money is coming and I don't know sometime between april 16th - may 14th.
thanks.

Richard_Webster

A bridging loan is likely to be very expensive (e.g. large set up fee) and may be difficult to obtain.

Your problem seesm to be that you cannot get much very definite out of the MOD. A lender is likely to want some very clear commitment on the MOD's behalf to pay a definite sum of money by a certain date. Have you got that?

The bridging lender may well also want a second charge on the property and your first mortgage lender may not be happy about that.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying client

benood

I would be very surprised if the retirees would pull out - they are just putting pressure on to move asap - if you explain your situation very clearly I would hope that they would understand - if not perhaps they would consider paying for your bridging loan?

Good luck hope it all works out.

paula.paula13

Hi there, don't worry, you are just being pushed around! If I were you I'd stick to the original deal. The people who are leaving the country won't be able to find another buyer before you can complete anyway. They will have to wait. Sometimes I wonder why people are so manipulative.

Tiger_greeneyes

One thing you could consider is to tell them you really can't do what they're wanting. If they think you're going to pull out, they might back down. If they don't back down, then they face remarketing their property and all it entails - including lengthy delays. They may even face losing a property of their own - which will ultimately cost them money, too.

It will probably be dearer and more aggrevation to go ahead with a bridging loan than to go ahead with a purchase on another house.

Not that it helps but there's one like that in every chain, believe me. You learn to expect things like that after a couple of purchases.

Try not to let them stress you out, what will be will be

jackkelly

Thanks all, think we should hold tight. The more I find out about bridging loans the less I think we should get one just to hold the chain together.
We have been completely honest with everyone about our situation, so think should just hold our ground.
Again what is meant to be will be, only we are using this move to relocate back closer to family, so we are both changing jobs, schools etc. So really need this move to go thru.

Tiger_greeneyes

Personally I think you're doing the right thing. They sound like bullies and want it all their own way, despite what it costs for everyone else.

I'm sure the schools and employers will understand because it's something that's not in your control.

I had a recent problem with my vendors and after I bent over backwards for months to accommodate everything she wanted, I eventually said 'enough is enough' and didn't budge - she soon caved and we exchanged without a hitch

I hope your vendors start seeing sense