Bridging loan

AskAsk

I am selling a house in London and I have received an offer from a couple who owns a house nearby without a mortgage.  They want to downsize and release equity from their property, which is 300k more than mine.  They have offered more than the asking price on the condition that I take the property off the market for 4 weeks to give them time to sell their house.  They offered 40k above the asking price as they are not in a proceedable position as they have had their house valued but have not yet put their house on the market.

I said this is too much of a risk for me as they could easily drop the offer price after 4 weeks.  So the estate agent has recommended a broker to them to get a bridging loan.  The broker has confirmed that they will be able to get a bridging loan to buy my house, so they have offered the full asking price.

Great news so far, but I am slightly uneasy about somebody taking out a bridging loan to buy my house, especially as the estate agent said that they won't sell their house until they have completed the purchase of mine as they can't yet sell their house under the terms of the bridging loan.  I am confused by the fact that they can't sell their house now.

Anyone know anything about bridging loans and can comment?  Is it because they are using their house as collateral for the bridging loan and so can't sell it?

Is there anything that I should look into before accepting the offer?

housebuyer219

Can’t say I’m too clued up on bridging loans apart from the fact we had a buyer who tried to get a bridging loan once his BTL mortgage application was declined and the sale eventually fell through due to the high interest rate on the bridging loan being too much for him to handle. 

That’s not to say it won’t work in your circumstance.. if it was me I would say you are happy to proceed but your keeping the property on the market for other offers 

GDB2222

Have your buyers actually seen the broker and had a quote for a bridging loan? They might be distinctly less enthusiastic once they know the costs. 

TadleyBaggie

I had a bridging loan when buying a new property and my sale was too slow. However in my case it was financed by my company who were relocating me.

AskAsk

GDB2222 said:

Have your buyers actually seen the broker and had a quote for a bridging loan? They might be distinctly less enthusiastic once they know the costs. 

the estate agent said the buyers have been speaking to the broker over the last week and they have gone through all the figures and are happy with it.  i am guessing the loan only needs to taken out when they complete on my house and so the clock ticks for them rather than for me.

but yeah, i should double check with the estate agent that the buyers have actually seen the broker and have got the quote for the loan.  i think the buyers are a bit fool hardy to take out the loan but they are keen to get the house and don't want to lose it from what i understand.