Bridging Loan Costs

kirstyb_2

Hi, I've posted this on the mortgages board but I thought I'd try here as well. My husband and I have just bought a new place and we need to bridge until the new owners move into our current place. We need to bridge for 3 weeks for the full purchase price of our new place which is 325.000. Although it may not be the cheapest loan, our solicitor is going to organise this for us to keep things as simple as possible. The charges are a 250 pound set up fee and 2.5% above the base rate. I'm absolutely rubbish at maths so could anyone please work out for us, roughly what this is likely to cost for 3 weeks. Thanks Kirsten

jonesMUFCforever

The maths has been worked out for you on the other board.

The set up fee looks cheap as most banks would charge 1% minimum, however the interest is dearer - as again with banks you could negotiate 1 or 1.5 % over base rate.
I'm intrigued how the solicitor are going to arrange this for you - are they lending you the money themselves? (Are they authorised to lend money etc) or merely introducing you to their preferred lender (and probably will get a kickback... sorry commission).

There is no mention in your post about security charges.To lend you money even on a short term basis has to be secured. Are they doing this for free?

kirstyb_2

Hi, our solicitor will just arrange bridging through the companies bank. Apparently there's no commision, its just a service that the company offers. In fact, our solicitor actually encouraged us to speak to our own bank to see if we could get a better deal. It seems to be quite common to arrange bridging through you solicitor in Scotland. I know my brother also did this. The bridging is being arranged as the people who have bought our house need an extra couple of weeks before they can move so, although the missives are completed, we will be purchasing our new place before we receive the funds for the old one. Apparently there's no security charges if the missives are completed.

Hope that makes sense, Kirsten

jonesMUFCforever

I didn't know you were in Scotland where the law is different.