Broken Chain - Bridging Loan

flanker7

My chain has broken down at the 11th hour.
My buyers buyer backed out and left us all up the creek! They were the bottom of the chain, so all houses are back on the market, but everyone is desperate for us to all get the houses we want.

The seller of the house we are trying to buy are concerned as someone else is interested in buying the house they want, so they have put an offer to us.

We were buying their house for £337k, and selling ours for £210k, which would after stamp duty etc meant a £148k mortage. The people who's house we want to buy need £280k to secure their house.

They have asked if we want to buy their house for their house for this £280k and then pay them the additional £57k when our house sells.

I would need to raise a further £142k remortgaging my existing house. Which would cost £700 a month interest only. They are willing to pay £200 a month of this. They are also willing to share any loss if my house sells for less than £210k. All this is temporary and is in effect a bridging loan, however I am able to do this on my existing mortgage deal without additional borrowing charges or redemptions when everything is complete.

Any thoughts? Worth the risk?

themaccas

In my opinion NO! It all sounds a bit messy, I understand your disappointment but you are in effect putting your finances in place to suit them. No matter how tough it is, walk away, remarket, the house for you is out there!

Just my opinion though. Good luck, house buying and selling is an absolute nightmare.

pickles110564

As written above, walk away because the cost of getting all the legal paperwork done could be expensive and if something goes wrong you could be out of pocket for a very long time, which would put you under great stress.
Also another buyer for you home could be just one phone call/viewing away, normally if things go wrong it might mean down the road you could pick up an even better new home.
Good Luck and keep your chin up as it will turn out for the best in the end.

silvercar

I wonder if your sellers would consider buying your buyer's house as a BTL. The chain would then complete and they could sell your buyer's house (I'm guessing its cheaper than yours) or rent it out for a year then sell it.

benood

We did something a bit like this a few years ago and it got us the perfect house. However, it is not for the faint hearted and you will struggle to get your solicitors to do it for you.

ehs_3

I would only consider this if you really want the sale to go ahead. And then I think given your sellers are asking you to take out the bridging finance, they shold drop their price to compensate for the additional fees you are going to have to foot. And remember these will be in the thousands, possibly over £10,000 if your house stays on the market longer than you hope.

Is there any reason why they don't want to take out bridging? Seems a bit of a cheek if they are asking you to do it when they are the ones who don't want to lose the house they are buying.

These chains are truly horrendous...