Buy house in cash or mortgage or bridging loan

Bartoni79

Hi,
I wonder if I could ask fir some advice.
I’m looking at buying a house to renovate and sell on. I currently joint own a house. I can just about afford it with savings (currently sitting in a low interest savings account). Is it better to buy cash and sell on in say 6 months or get another mortage / bridging loan? I could incur less costs paying cash but if the market drops it’ll I can find a buyer a lot of my money will be tied up in the property. I’d be keen to gear any views on this.

Thanks

anselld

If you have no alternative use for the capital other than low interest savings then having it tied up is not an issue and there would be no point in mortgaging.

If you decide to hang onto the property then mortgage after refurb is complete when you will get a wider market and a better LTV. Though again, only any point if you need the capital for something else.

00ec25

it seems you cannot make a decision to save your life going by your other post.
Don't even think about going into property development when you ask such a naive question about how to fund a business

jonnygee2

Well, clearly it would be better to use cash, it's cheaper so the return will be better, and you'd be a more attractive buyer so might get a better price.

The risk is not really changed by the financing option you choose - if it loses value it loses value, your net position will fall regardless. If you need cash later you can borrow against the house at a later point.

Still, it seems like you are taking on a lot of risk with a project like this, especially at the moment. Is it really worth it?

kingstreet

Mortgage lenders don't provide such lending. They are looking for longer-term ownership.

You would need commercial finance for property development.