Bridging Loan / short term mortgage for extension - Pensioners - asset rich, cash poor!

mystic_trev

Hopefully I’m posting in the right board?!

My partner and myself own two houses, in the same town. We’re going to sell one, but not until we’ve extended the other which will see us through our latter years. We will be living in one house while the extensions done on the other, and will need to borrow a fair chunk of money until we move and sell the house we’re living in. We both have good Pensions and other investments and could, luckily, easily afford to pay for the extension but unfortunately that would result in us being saddled with an expensive CGT bill, which we’d like to avoid!

We’re looking at borrowing around £200k over a period between six months and a year and would like any ideas / suggestions our best way to raise that?

Thanks

K_S

@mystic_trev When you say you have "good Pensions" do you mean actual income currently being received or future projections? If current, then you could potentially borrow as much as the income can support at decent rates.

If your income is nowhere near sufficient to support the 200k borrowing required, then a bridge loan may indeed be an option if there is sufficient equity in the properties for security.

mystic_trev

K_S said:

@mystic_trev When you say you have "good Pensions" do you mean actual income currently being received or future projections? If current, then you could potentially borrow as much as the income can support at decent rates.

If your income is nowhere near sufficient to support the 200k borrowing required, then a bridge loan may indeed be an option if there is sufficient equity in the properties for security.

My Partners is a Local Government pension, not great but when added to her State Pension and my Pension, more than sufficient for us to live on. My Pensions in a SIPP that I stopped drawing down on when I received my State Pension last year. The reason I did that was because I receive income from two BTL’s of £1k per month each. Add those two our two homes and we own properties  (mortgage free) gulp….. around £2m! I feel a bit embarrassed to admit it! 

K_S

@mystic_trev If the current income (BTL+LGPS+state pension) is around 45k+, you should have options to borrow the 200k needed at mainstream/mainstream-ish rates with an appropriate lender.

If not, you could also consider get a bridging loan for a 6-12m term secured against the one/more of the unencumbered properties. This will be a more expensive option than the above, about 0.5%/month plus high fees.

mystic_trev

K_S said:

@mystic_trev If the current income (BTL+LGPS+state pension) is around 45k+, you should have options to borrow the 200k needed at mainstream/mainstream-ish rates with an appropriate lender.

If not, you could also consider get a bridging loan for a 6-12m term secured against the one/more of the unencumbered properties. This will be a more expensive option than the above, about 0.5%/month plus high fees.

Thanks - much appreciated!