Bridging loan ?

witm8

Going to keep this simple and only include details:

House 1 - Currently living in.
House 2 - Going to buy.
House 2 - Needs renovation, extention - Will be paid for by sale of House 1 (as well as initial purchase price).
House 2 - Renovation, extention will take 6 months(ish) - Will live in House 1 for duration.

We can't sell House 1 until House 2 is finished.
We can't pay builders etc until House 1 is sold.


What is the usual situation as I'm sure this this is not unusual ?


Do I need one of those awful bridging loans that I've heard about - with massive interest rates etc ??


Thanks

Foxy-Stoat_3

witm8 wrote: »

Going to keep this simple and only include details:

House 1 - Currently living in.
House 2 - Going to buy.
House 2 - Needs renovation, extention - Will be paid for by sale of House 1 (as well as initial purchase price).
House 2 - Renovation, extention will take 6 months(ish) - Will live in House 1 for duration.

We can't sell House 1 until House 2 is finished.
We can't pay builders etc until House 1 is sold.


What is the usual situation as I'm sure this this is not unusual ?


Do I need one of those awful bridging loans that I've heard about - with massive interest rates etc ??


Thanks

Normal situation is sell house 1, buy house 2, live in it while you carry out renovations/extension. If living in it is not an option, buy a caravan and live in that until you can move into part finished or completely finished, then sell caravan.

Or if the other party agrees, borrow the money needed to carry out the renovations, but you will have to give away half of the future equity.

http://forums.moneysavingexpert.com/showthread.php?t=5156311&highlight=

CrisAdams

You could open a home equity line of credit on your current home. Just make sure it does not impact you qualifying for the 2nd home and pay it off once you sell your home.

If you can quality for two mortgages, you could also consider seeking a bridge loan from a relative for the down payment on the new home. You would most likely pay back this short-term loan when your home sells.