Bridging loan - first time buyer

mastersb

Hi, My mortgage application is not going through successfully because of self employment, defaults etc. i have decided to get a bridging loan and pay it after 12 months using remortgage.

I have a few questions:

1. They are asking for security, as I am first time buyer can the new house be used as security?

2. How is the lender going to deal with vendor's solicitor? Because our welcome pack from solicitor is based on mortgage.

Any ideas? Has anyone done bridging loan being first time buyer without any homeowner status?

Help appreciated.

Senior_Paper_Monitor

A bridging loan (aside from being expensive) in this circumstance is simply a short term mortgage and will be regulated in the same way as a mortgage.

Very few lenders can do this and (speaking for ourselves) brokers would be very reluctant to proceed because of the danger of no exit route at the the end of bridge.

An additional potential problem (of many) - bridging loans are generally for lower maximum LTV than mortgages (even adverse credit ones) and often use the auction price rather than market price as the 100% measure.



In short - I suspect you are going in the wrong direction. Sit down with a broker and they should tell you what is available now and what over what period of time needs to be done to achieve your objectives.

Brock_and_Roll

I agree that you are going in the wrong direction towards a dead end.

Bridging loans are (usually) used in circumstances where an existing property owner (with a fair bit of equity) wants to be able to buy another property before selling the current one.

Bridging loans are not cheap and if things don't go to plan for any number of reasons (illness, unemployment, sale falling through etc etc) you can be left in a right pickle. I once had an open bridge for over 500k - scariest 6 months of my life - never again!

Anyway, given your credit rating and self-employment, you are unlikely to get one anyway unless you have a huge amount of cash to put into the purchase.