Open bridging loans , ridiculous?

iwanna

My buyer pulled out just when we were due to exchange. I'm trying to do what i can to get a new buyer in place asap and hopefully lessen the risk of losing the house i had found to buy.

The vendors are as upset as i am, and are being very helpful in giving me a bit of time before they will need to re-advertise.

They've asked if i would consider a bridging loan - not knowing anything about these i've just done a bit of reading and see since i don't have another offer it would need to be an open bridge.
Obviously i want to do what i can to try to keep this house, but such loans appear ridiculous to me :cool: Am i right in thinking i'd then be liable to pay: the mortgage for property i'm selling + mortgage for the new property + bridging loan ???

All this with no actual guarantee my property will sell? Surely no house, no matter how great you think it is, is worth this much risk ? Or am i missing something ?

Dan-Dan

iwanna wrote: »

All this with no actual guarantee my property will sell? Surely no house, no matter how great you think it is, is worth this much risk ?

This , in CAPITAL LETTERS

Lou67

I have to admit, I would never ever go down this road... It would've been an OK thing to do some 10+ years back, when houses sold much faster, but you could be in deep doo-doo doing this. I would throw in the towel and turn that house down, and wait for your house to sell. (Hopefully, the house you wanted may still be available...)

A bridging load can push you into SERIOUS financial difficulty, should your house not sell.

http://www.thisismoney.co.uk/money/mortgageshome/article-1585106/Bridging-loans.html


Don't do it. I wouldn't...

rpc

A closed bridging loan, probably OK as long as it doesn't hurt too much financially.

An open bridging loan? Totally daft. It is a massive open ended liability, even if your mortgage co would accept it.

iwanna

Cheers guys, for confirming my thoughts.

I think i'm more concerned about how to tell the vendors "i have considered bridging loans, but decided i wouldn't touch one with a barge pole" hopefully in a slightly more diplomatic manner lol

hazyjo

iwanna wrote: »

Cheers guys, for confirming my thoughts.

I think i'm more concerned about how to tell the vendors "i have considered bridging loans, but decided i wouldn't touch one with a barge pole" hopefully in a slightly more diplomatic manner lol

Put the blame on someone else then - say your mortgage co has said you can't do it. Or solicitor has strongly advised against it, etc.

Jx

iwanna

hazyjo wrote: »

Put the blame on someone else then - say your mortgage co has said you can't do it. Or solicitor has strongly advised against it, etc.

Jx

Good thinking Hazyjo, chances are my mortgage company wouldn't be too enamored with the idea anyway

Thrugelmir

iwanna wrote: »

I think i'm more concerned about how to tell the vendors

Be honest. Bridging finance really only works in situations where the cost of servicing the debt is no issue, or there is a genuine reason for a staggered exchange of contracts. Without a buyer on the horizon for your property. The risk is all yours. Something that the interest cost charged on bridging finance factors in.

geoffky

The last thing i would do is take a bridging loan...Far too risky..

StuC75

Has the buyer provided and reason? in case of anything that may put another buyer off?