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Bridging Loan
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NOWSE
Posts: 386 Forumite

We are looking to buy a house which we wish to make alterations to before we move in.
Our original plan was to sell our existing, mortgage free, property and move into rented accommodation whilst the alterations were being made. Something that I'm not entirely happy with. Today it occurred to me that an alternative might be to take a bridging loan. This would allow us to secure the proposed new property without having the pressure of hoping for a quick sale on our existing house. i'm thinking in terms of such a loan for around 6 months
I have made a tentative enquiry, with a company that came up with an internet search, and such a plan seems feasible.
Obviously I'm looking for a competitively priced loan. Has anyone any suggestions about who I might make further enquiries to about such loans?
Our original plan was to sell our existing, mortgage free, property and move into rented accommodation whilst the alterations were being made. Something that I'm not entirely happy with. Today it occurred to me that an alternative might be to take a bridging loan. This would allow us to secure the proposed new property without having the pressure of hoping for a quick sale on our existing house. i'm thinking in terms of such a loan for around 6 months
I have made a tentative enquiry, with a company that came up with an internet search, and such a plan seems feasible.
Obviously I'm looking for a competitively priced loan. Has anyone any suggestions about who I might make further enquiries to about such loans?
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Comments
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NOWSE said:We are looking to buy a house which we wish to make alterations to before we move in.
Our original plan was to sell our existing, mortgage free, property and move into rented accommodation whilst the alterations were being made. Something that I'm not entirely happy with. Today it occurred to me that an alternative might be to take a bridging loan. This would allow us to secure the proposed new property without having the pressure of hoping for a quick sale on our existing house. i'm thinking in terms of such a loan for around 6 months
I have made a tentative enquiry, with a company that came up with an internet search, and such a plan seems feasible.
Obviously I'm looking for a competitively priced loan. Has anyone any suggestions about who I might make further enquiries to about such loans?
You need to factor the 3% extra stamp duty though whichever way you do it.
I looked into bridging loans and it was too rich for my taste. Ricky and highly expensive..0 -
NOWSE said:his would allow us to secure the proposed new property without having the pressure of hoping for a quick sale on our existing house.
The interest rates on bridging loans are eye watering. You could easily be looking at 1% per month, which is 12.7% per year.
To put that another way - 6 months of bridging loan interest on a £250k property could easily cost you £15.5k. On top of thousands of pounds in arrangement fees, legal fees and survey fees which you'd need to pay. On top of the higher rate stamp duty on your onward purchase.
Renting while the renovations are done will be cheaper than a bridging loan.1
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