Bridging Loan

yellowpollycat

Hi has anyone recently had a bridging loan?  We are ready to exchange on our purchase but our buyer's solicitor is requesting evidence that our builders paid a land charge for street works back in 2014 (house was built in 2018) and we seem to have reached an impasse.  The council and builder won't supply this financial information and there is no indemnity policy (we have the S106, s38 etc).  I just wondered if a bridging loan would enable us to complete on our purchase before the end of September to save Stamp Duty while the buyer and their solicitor decide the next steps?

Slithery

It could well cost more in interest on the bridging loan than you'll save on stamp duty, especially if your current buyer ends up pulling out and you have to find a new one.

Ally_E.

Too risky, what is to say the buyer won't pull out of the sale because of this issue?

yellowpollycat

Hi, have you heard of this issue?  It's the first time my conveyancer has had this evidence of payment query.   A few people have sold on the estate and not had this question either.  The s38 agreement is in place dated 2015 and states that a bond must be paid - she want evidence that it has been.   

london21

Bridging loan is expensive for example 0.5% interest per month. 

If you are a first time buyer after September 2021 you still get £300,000 allowance before stamp duty is payable. 

badger09

london21 said:

Bridging loan is expensive for example 0.5% interest per month. 

If you are a first time buyer after September 2021 you still get £300,000 allowance before stamp duty is payable. 

OP is not FTB though as they are selling their current property

london21

badger09 said:

london21 said:

Bridging loan is expensive for example 0.5% interest per month. 

If you are a first time buyer after September 2021 you still get £300,000 allowance before stamp duty is payable. 

OP is not FTB though as they are selling their current property

True, in that case the stamp duty savings will be less than the bridging loan cost. 

Doozergirl

Have you had a quote for a bridging loan?  I was quoted 26% for a year plus arrangement fees.   It's like a secured payday loan.  

You haven't even exchanged contracts. No way.  

yellowpollycat

Thanks everyone.  Bridging Loan way too expensive.  We still have the issue of the buyer's solicitor asking for evidence that the Developer paid a bond back in 2014 which is holding things up.  The Developer refuses to provide evidence and say it's not relevant as the s106 indemnifies the buyer.  The house we are buying is empty, so we are going to exchange and then rent it until our sale goes through.  It's really annoying as there are 3 houses on our road being sold and I'm the only one who has had that question raised?

Slithery

yellowpollycat said:

The house we are buying is empty, so we are going to exchange and then rent it until our sale goes through.

If you are purchasing with a residential mortgage then this won't be allowed. Also what makes you think that your tenants will want to leave their home when your sale does go through? You're looking at probably 2024 before you'll be able to legally evict them.

yellowpollycat

Slithery said:

yellowpollycat said:

The house we are buying is empty, so we are going to exchange and then rent it until our sale goes through.

If you are purchasing with a residential mortgage then this won't be allowed. Also what makes you think that your tenants will want to leave their home when your sale does go through? You're looking at probably 2024 before you'll be able to legally evict them.

Sorry, I wasn't clear.  The house we are buying does not have a mortgage and that is the one we will exchange upon without a completion date and then rent and live in.  Our property will remain empty until the sale goes through.