Mortgage/Equity Release/Bridging Loan

CRMONEY

I am in the process of purchasing a new property. The purchase will be completed before I sell my current property, had to do so to secure the property. Before I move into the new property, some alterations need to be carried out. Looking to secure £100.000 of funding for alterations. Life used to be simple regarding getting funding not sure what options are available/best at this time. New property £310,000, current property £400,000 – both properties owned outright.

1.      Mortgage

2.      Bridging loan

3.      Equity release

4.      Other ?

Any option needs to be interest only for 2-3 years, time needed to cover getting work done and current house sold.

Any guidance would be appreciated.

MWT

Do you have a mortgage on your current property?

The relatively short time period would usually suggest bridging finance, but nothing to stop you taking a normal mortgage (assuming you can meet the affordability requirements)  on a standard variable rate or tracker so no ERC and just paying it off when you want to ...

Time to talk to a broker perhaps?

Bluebell1000

Offset mortgage on your new property? You'd need to get it in place before you buy, and can then offset the balance once the sale of your old house is complete.

simon_or

Cheapest option - if the new property is mortgageable, then once you have bought it see if you can take out a mortgage on a 2 or 3 year fix or variable rate on it with a bank that allows this within 6 months of purchase. You will need to qualify with sufficient income to borrow 100k on a standard mortgage and meet interest only requirements if that's what you need. 

If you haven't put the current property for sale yet, then you could think about doing the above on that property.

Bridge - max is 12 months with most bridging loans, and you'll pay a pretty penny if you carried on that arrangement for 3 years!

I've read on these forums that there are some banks offering something in between a bridge and a long term mortgage, but I haven't used anything like that.