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How to fund a house purchase?
Comments
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getmore4less wrote: »If they were looking why was their place not on the market or at least prepared?
Because sometimes you aren't actively planning to move but then see something that you think is perfect for you?You can pick your friends and you can pick your nose but you can't pick your friend's nose.0 -
As I thought, although I didn't know bridging loans were hard to get. They probably can't afford both both mortgages. They said something about a buy to let mortgage on their present house for a short time. Don't know if that's feasible?
Well I don't know much about bridging loans, so take a look. But remember they're lending you a house worth's of cash over what's meant to be a short period. They need some solid assurances they'll be getting it back and mortgages are already secured on both properties.
Getting a BTL on their current place wouldn't be possible whilst they're still living in it. Maybe they could make getting a BTL linked into the house purchase. BTL pays off current mortgage, allowing them to take out a new mortgage on new place. If they wanted to go down this route they'd be advised to get a broker as it may not be simple.
However they'll then need to rent out their old place. You can't really do this using it as an effective bridging loan, ERC (early repayment charge) on the BTL will cause problems for one thing. Getting tenants will also be tricky if you're attempting to sell it at the same time!0 -
Oh and BTL tends to be max of 75% LTV. So using a BTL mortgage they wouldn't get as much equity out of their old house as they would with simply selling it. This could cause issues for the onward purchase.0
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Well, thanks for all the helpful advice. They think they've sorted it, by converting their mortgage to buy to let and borrowing from the bank of mum and dad. Fingers crossed it works!0
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