Short Term Loan

DaveInSomerset

We are trying to help Mother In Law move into an assisted living home as quickly as possible. We have found the home, and had an offer accepted on condition we can complete in a few weeks. The sale of her existing home could take a while and speed is of the essence.

The property she is buying is £260,000, and the one she is selling is about the same.

She has £120,000 in savings and we are able to lend her £80,000 by drawing down on our overpaid offset mortgage.

Her other daughter wants to lend her the remaining £60,000. Her home is worth well over a million and has no mortgage. She is not working but has a reasonable pension coming in.

What is the best way for her to get £60,000 for a short term loan for hopefully just a few months while the house sells? Financial advisor has suggested a mortgage or several unsecured loans. The former will entail at least a £1000 early redemption, and is not quick enough. Not sure about the unsecured loan route.

What would people advise?

TIA David

[Deleted User]

Why are they putting pressure on to complete "as quickly as possible"?
After all that could be next week or next year.

DaveInSomerset

It was the deal for the offer we made - they'd accept the low-ish offer in return for a quick sale.

[Deleted User]

Given the sums involved, personally I'd disregard the £1k early repayment penalty and persue that option - bridging loan would likely cost the same or more.

Independent legal advise could be a stipulation depending on lender, so budget for that too plus valuations etc.


Bridging loan certainly won't be the "cheapest" way of doing it, but will probably be the quickest/less hassle, but you pay for that through the interest rate.

Alternative is a secured longer term loan which seems to be what IFA has suggested - would be cheaper but may involve a few more checks, lenders can hurry if pressed though.

Other option is seeing if she can get several loans in the £7.5k to £15k range - one after the other. Try something like clearscore - are any pre-approved? If you have a couple pre-approved then it's a possibility to try them all on the same day.

But then there are multiple payments to sort out, short term damage to credit profile, who will service the monthly payments in say 12 to 18 months if the sale doesn't complete quickly (will pension support it? Can MIL assist?)

DaveInSomerset

Thank you. I'll pass the info on to my sister in law. Appreciate your help.