A bridge too far?

mdori003

Currently looking to sell first home; small flat

Looking at dream home with wife, 4 bed detached in excellent area, cost ~400k. Just about affordable (combined gross salaries ~100k)

With sale of flat hoping to get about 80k profit, on sale but no offers yet. Will also likely port mortgage due to ERCs

already fortunate to have deposit of 55k without the sale

very keen on house, keen to have it off the market but feel unlikely owner (who wants a quick sale) would do so knowing we are in a chain. Should I just wait and see or is it worth the extra risk and expense of a bridging loan? and the additional stamp duty (which as i understand can be claimed back if flat is sold within certain time scale)

Appreciate any comments, thanks

Surrey_EA

Problem is you're not in a chain yet, you will be once you've found a proceedable buyer.

Not many sellers will take their property off the market to wait exclusively for one person to sell.

Bridging loans are much rarer than they once were, and can be terrifically expensive. Not worth the risk in my view.

hazyjo

I would never offer without a complete chain beneath me.


Makes it more appealing to others (human nature).


Doesn't give you much wiggle room on your price.


They might drop their price without your offer on it.


Lots of other reasons that I've listed before (search for 'human nature' as I know I always throw that one in so I can find the list each time).


Would absolutely not consider a bridging loan - what if it falls through and what if it takes a year to actually find another house (or more if more chains collapse) as it's taken me before? Really can't believe this house would be worth that risk (and having to fork out temporarily for the stamp duty).

Crashy_Time

mdori003 wrote: »

Currently looking to sell first home; small flat

Looking at dream home with wife, 4 bed detached in excellent area, cost ~400k. Just about affordable (combined gross salaries ~100k)

With sale of flat hoping to get about 80k profit, on sale but no offers yet. Will also likely port mortgage due to ERCs

already fortunate to have deposit of 55k without the sale

very keen on house, keen to have it off the market but feel unlikely owner (who wants a quick sale) would do so knowing we are in a chain. Should I just wait and see or is it worth the extra risk and expense of a bridging loan? and the additional stamp duty (which as i understand can be claimed back if flat is sold within certain time scale)

Appreciate any comments, thanks

So you would take the risk of being in the new home with a bigger loan and potentially stuck with a flat you can`t sell, or sell at a price you want, and all the hassle that will be?

millysg1

We were in same position, we found the house we wanted but house not sold. They wouldn!!!8217;t accept an offer, unsurprisingly. We ended up selling with same EAs that we wanted to buy thro and we came to an agreement on price we cud offer based on what they could sell our for. Therefore, we were lucky than when we wanted a quick sale and accepted a lower price than we would have liked, we could offer less on the house we wanted and that was accepted.

We did look into bridging loans but they are very very expensive! I think it was going to cost £2k per month In interest only.

silvercar

Some would suggest keeping your current home and renting it out. Port your current mortgage to the new property and get a new BTL mortgage on the current home. Whether:

You have sufficient equity/ deposit money to do this
Wish to become "accidental" landlords
Can face the hassle and costs of maintaining 2 properties

is a decision to ponder, but it is an option.

glasgowdan

I suggest sell the flat quick and cheap and buy the home you want for your family. If that 80k profit actually turns out to be 60k, is that a big deal in the big picture? I doubt it. So you could go in with 100k deposit with enough to cover costs and basic decorating. A 300k mortgage will be hefty but should be comfortable if you both maintain employment.

mdori003

Thanks for all the replies! The more I read the more I agree with the consensus that bridging loans are a pretty terrible idea, so shelving that.
Renting out the current flat may be too much hassle for us to be honest, we both work long hours and planning to have younger humans running about in the near future if possible.
At present we are holding tight trying to get the flat sold and hoping for the best. We may have gotten too attached to the house we were looking at so might hold back on viewings until we at least have an offer on the table for our own property!

teddysmum

A colleague of my husband took a bridging loan to partly finance the purchase of a bungalow in need of some refurbishment, but just what was wanted. The plan was to vacate the current house and live in the bungalow while doing the work needed.


The house, in a nice area and well priced did not sell, but the colleague managed to sell the refurbished bungalow, so now is back in the original house, having lived in a virtual building site and paid out huge amounts on the bridging loan and selling/buying/moving costs.

dunroving

mdori003 wrote: »

Thanks for all the replies! The more I read the more I agree with the consensus that bridging loans are a pretty terrible idea, so shelving that.
Renting out the current flat may be too much hassle for us to be honest, we both work long hours and planning to have younger humans running about in the near future if possible.
At present we are holding tight trying to get the flat sold and hoping for the best. We may have gotten too attached to the house we were looking at so might hold back on viewings until we at least have an offer on the table for our own property!

The added advantage of this is that sellers will take you (and any offer you make) more seriously.

Crashy_Time

mdori003 wrote: »

Thanks for all the replies! The more I read the more I agree with the consensus that bridging loans are a pretty terrible idea, so shelving that.
Renting out the current flat may be too much hassle for us to be honest, we both work long hours and planning to have younger humans running about in the near future if possible.
At present we are holding tight trying to get the flat sold and hoping for the best. We may have gotten too attached to the house we were looking at so might hold back on viewings until we at least have an offer on the table for our own property!

Best move IMO.