Bridging loan help

Boogal312019

My father has gotten himself into a complete pickle and has financially ruined himself. He was encouraged to take out a bridging loan to buy a smaller house as he could not afford to run it. He did this and he house did not sell. He was stuck with the loan for the full term and then had to rebridge to pay off the interest and then sold the smaller house and moved back into the bigger house again. He has zero money - he never had an income and the house was in disrepair and never likely to sell to cover it.

Any advice on how to help him, he is vulnerable and I don’t know what to do to help him.

letitbe90

I’d probably start by shouting at whoever convinced him a bridging loan was a good idea.

AdrianC

Does he still owe money?

He lives in a house that's larger than he needs, and is in disrepair? How bad is the disrepair?
Everything will sell if it's cheap enough - would the plot sell for demolition and rebuild? How large is the plot, where in the country, and what's the immediate area like?

G_M

Wellthe obvious answer is for you to help him financially by paying off his loan(s).

* do you have savings? Assets?
* could you get a mortgage yourself?
* do you have siblings?
* Are you likely to inherit in due course?
* Or you could loan him the money with repayment from his estate in due course

If none of the above are feasible and advice is needed specifically for him, then far more information needed eg
* his income
* any benefits/pensions
* his savings
* other assets
* size/condition of house
* number of occupants (spouse? children? lodger(s))?
* size of current loan(s)
* type and interest rates of loans
* value of property

Boogal312019

I’m new to this hope this reply works

He owes about 390k no idea how I can’t lend him that. He is trying to sell and has dropped the price from 585 to 525 but it’s still not shifting.

It’s a beautiful house but small plot for a six bed and he has had no money for maintenance.

Decking is ruined garden in a state house needs painting - it’s dated inside etc

I cannot believe he is in so much debt - he took a 50k loss on the smaller house to get out quick and because he was told he would get 2% of his stamp duty Bk but then didn’t.

Boogal312019

Oh it’s in Torquay

It’s a six bed and he lives alone. I have two siblings but both in early twenties and no money to speak of.

Dad has no income no pension no other assets

Boogal312019

Do I shout at the broker (who made 5.5k) or new homes limited who pressurised him into the purchase?

Boogal312019

do you have savings? Assets? I have no savings and a few properties but I’ve maxed out what I can borrow as I am extending my residential property
* could you get a mortgage yourself? No I have a residential and would not meet affordability
* do you have siblings? Two but young no money
* Are you likely to inherit in due course? He is only 62

* Or you could loan him the money with repayment from his estate in due course I cannot afford 390k


If none of the above ar feasible and advice is eeded specifically for him, then far more information needed eg
* his income - none
* any benefits/pensions
Was on UC currently eBaying his belongings to survive - no pension just state when eligible
* his savings none
* other assets
* size/condition of house - six beds - needs updating some remedial work
* number of occupants (spouse? children? Just him no lodger(s))?

* size of current loan(s) 330k and 60k in debt
* type and interest rates of loans - bridge is 20k every six months I think - 9%
* value of property allegedly 525k

Is that everything?

AdrianC

There's really two questions here...

1. Property and debt.

Boogal312019 wrote: »

He owes about 390k

He's sold the second property, and STILL owes the thick end of £400k?

He is trying to sell and has dropped the price from 585 to 525 but it’s still not shifting.

Then it's probably still too expensive. Would you point to a RM link?

It’s a beautiful house but small plot for a six bed

Still big enough for development?

Decking is ruined garden in a state house needs painting - it’s dated inside etc

That's minor stuff. It's weathertight, with no structural problems?

---

...and...
2. Complaining about the financial advice.

Boogal312019 wrote: »

Do I shout at the broker (who made 5.5k) or new homes limited who pressurised him into the purchase?

That's a much harder one. I presume your father is still competent to handle his own affairs? If so, then he's legally free to make whatever terrible decisions he wishes... Whether the advisors gave him bad information is another question.

Unless you have power of attorney, there's nothing YOU can do - anything would need to come from him. Even if you have PoA, he's still free to make his own terrible decisions as long as he's competent.

Boogal312019

There's really two questions here...

1. Property and debt.
“
He owes about 390k
Originally posted by Boogal312019
”
He's sold the second property, and STILL owes the thick end of £400k?

Yes I don’t understand how. He did equity release originally but ran out of money. He had a sale of his property and was getting the bridge to buy the smaller house and pay off equity release. The house sale fell through and he was stuck with the loan. When it came to end of years term he had to sell the new house (at 50k loss) then rebridged to pay off original bridge I think.

“
He is trying to sell and has dropped the price from 585 to 525 but it’s still not shifting.
”
Then it's probably still too expensive. Would you point to a RM link?

It won’t let me but it’s rock house Edginswell Lane Torquay Devon - should find it on Zoopla

It’s a beautiful house but small plot for a six bed
”
Still big enough for development? Could knock it down and maybe fit three small houses on it but it’s small hamlet with mainly big houses

“
Decking is ruined garden in a state house needs painting - it’s dated inside etc
”
That's minor stuff. It's weathertight, with no structural problems?

Yes but agent says that when buying a half million pound house it needs to be in good condition no one wants a sad house

---

...and...
2. Complaining about the financial advice.
“
Do I shout at the broker (who made 5.5k) or new homes limited who pressurised him into the purchase?
Originally posted by Boogal312019
”
That's a much harder one. I presume your father is still competent to handle his own affairs? If so, then he's legally free to make whatever terrible decisions he wishes... Whether the advisors gave him bad information is another question.

Unless you have power of attorney, there's nothing YOU can do - anything would need to come from him. Even if you have PoA, he's still free to make his own terrible decisions as long as he's competent.

He is competent (although I believe on the autistic spectrum but never diagnosed) he is vulnerable because he was desperate. I don’t think they explained the risks in writing just glossed over it and wanted their fee upfront.

Hilary

AdrianC

Boogal312019 wrote: »

He's sold the second property, and STILL owes the thick end of £400k?

Yes I don’t understand how. He did equity release originally but ran out of money. He had a sale of his property and was getting the bridge to buy the smaller house and pay off equity release. The house sale fell through and he was stuck with the loan. When it came to end of years term he had to sell the new house (at 50k loss) then rebridged to pay off original bridge I think.

There's a very simple answer. Interest.

What APR, what timescale?

Then it's probably still too expensive. Would you point to a RM link?

It won’t let me but it’s rock house Edginswell Lane Torquay Devon - should find it on Zoopla

https://www.rightmove.co.uk/property-for-sale/property-71361194.html
Doesn't look that bad. Perhaps the agent's overselling it a bit and scaring people off...? I'd have thought a good agent would shift that in no time flat - even if it is a bit squeezed in to that plot.