Mortgage refused, alternative option (Bridging loan)

asu1z

Dear All

I am first time buyer and want to buy a house but I have been refused the mortgage. I successfully got AIPs from two lenders but underwriters of both lenders refused my application and both not willing to share a reason of refusal with me. I dont want to miss out on the house. So I am looking for alternative options for buying the house.

House value is 250,000
Deposit available 160,000

I am short by 90,000 pounds. My question is, is there any sort of loan I can apply to raise another 90,000 pounds. Someone told me that Bridging loans can be applied. I am looking to apply for a bridging loan of 90,000 and I will pay this loan soon after buying the loan by getting secured loan against the property? Does this work with the lenders?

If not any other option available?? Please help me out.

Regards

ACG

Most bridging lenders will want to see an exit strategy in place, saying what you will do is not usually enough unless you pay through the nose for it.

From a security perspective it would be better for you to not only know your exit strategy (from the bridge) but who it will be with and the rates etc.

Speak to a broker with your credit reports. It might be possible to get a mortgage on a residential basis which will be a lot cheaper than a Bridge AND a secured loan... you may just not be able to get it with a high street lender.

Not enough info to go into more detail which is why i think a broker is the best route, they can do a factfind and go over your credit reports etc.

Dave_Ham

Agree with ACG, there will be a reason for the fail and imagine a broker will quickly determine this.

Bridging would be an incredibly expensive option, without knowing what your issue is.

Hunt down a decent broker

asu1z

ACG - Thanks a lot for quick and helpful reply.

My exit strategy is:

1. I am looking to get a secured loan of 90,000 on the property 6-8 months after I buy it. OR
2. I will be getting a share from inheritance from property overseas approximately 1 year from today. I can use this to pay bridging loan. OR
3. I can apply for the mortgage on the property after I buy it to pay bridging loan.

What do you think? Will the above exit strategy work. Should I speak to some financial adviser/broker?

Ideally I need a mortgage but my mortgage is not going through. I know it is not wise but I dont want to loose on this house. Vendor is already fed up from my my two unsuccessful mortgage applications so will not wait. So my last shot is to apply bridging loan.

Please suggest??

asu1z

Dave_Ham wrote: »

Agree with ACG, there will be a reason for the fail and imagine a broker will quickly determine this.

Bridging would be an incredibly expensive option, without knowing what your issue is.

Hunt down a decent broker

Dave - Thanks for your reply. Both lenders are not willing to share the reason so I am completely lost about the reason for refusal. I think I have good credit history. I have 5 credit cards worth of 30,000 pounds and i pay they full at the end of each month. Whatever I apply (like mobile contract, DFS loan, credit card, store card) I get it.

My question here is, do I qualify for bridging loan with the three point exit strategy I mentioned above.

I know it might not be a good idea to apply for Bridging loan but I do not see any other option to buy this house.

Dave_Ham

Sensible broker should find a solution without bridging I would imagine.

Who are the 2 lenders who have refused?

The exit strategy if packaged appropriately will probably suffice, subject to credibility of the detail

Wh05apk

Why do you think you will be able to get a bridge/secured loan/mortgage later if you cannot get one now?


You need to find the real reason your application has been declined, what did your broker feel was the reason for declines previously?

asu1z

Wh05apk - The reason I think I can get a secured loan later because after buying the house with the bridging loan of 90,000 I will have equity of 160K within the house to apply for a secured loan of 90,000 on it.

I made first application direct with Santander and second application with Nationwide through a broker. After I got refusal from Nationwide, my brother completely turned his back on me. He is not replying my emails at all. He gave me refusal news from Nationwide and said I can not be of any further help. I am very angry because of his behavior and thinking of making official complaint against the company. Nobody gives me refusal reason so what can I do?

I have requested for the copy of my credit file for 2 pounds from callcredit.co.uk to see if anything alarming in it. Please suggest what else I can do to find out the reason of mortgage refusal.

Wh05apk

asu1z wrote: »

Wh05apk - The reason I think I can get a secured loan later because after buying the house with the bridging loan of 90,000 I will have equity of 160K within the house to apply for a secured loan of 90,000 on it.

You already have £160,000 equity in the property, or are you buying the property at less than this, but it is "worth" £250,000?

asu1z

Wh05apk - The house is worth 250,000. I have 160,000. I need bridging loan of 90,000 to meet the purchase price of 250,000. After purchasing I will have equity of 160,000 or more in the house, then I plan to pay of 90,000 bridging loan by getting a secured loan of 90,000 on the property.

Is this workable?

Wh05apk

You will have equity of £160,000 if you purchase on a mortgage, so I do not see that you will have much more chance of getting a bridge/secured loan, the criteria is similar, you need to find out the real reason for the declines, your broker should be able to give you a clue, you need to get back to them raising a complaint if necessary.