Is a Bridging Loan an option for me?

T8T

Very sadly, both my parents passed away a few years ago. I am a 50% recipient of their estate/inheritance, including their house, that I currently live in, and have done for years. I have dragged my heals and stalled the probate process, in an attempt to give myself enough time, to revive my income potential, so that I’m in a financial position, to buy out the other half of the house, from the other 50% recipient. This in itself, has taken a long time, not least because of the whole grieving process, which has been long and hard for me. A few medical issues didn’t help either. Don’t feel pity on the other recipient, for my delaying, because frankly, they don’t deserve a penny, from the way that person treated my parents (it’s a long sad story, heavy on irony, including Alzheimers, that there isn’t time enough to tell here).

I cared for Mum and Dad for 4 years until they passed. Currently still unemployed drawing universal credit, very little savings. I want to get back into running my own business, which I was doing before it had to be sacrificed, to care for my parents. I currently have three new business plans, for three separate ventures. Combined, they should prove profitable enough, quick enough, to cover any loan that would be required to cover paying off the other recipient’s half of the house. As I understand it, Bridging Loans can usually extend to 12 months (I’ve also seen mentioned 18-24 months, under special circumstance). So, this is the timeframe, I’m referencing.

When Googling ‘Bridging Loans’, I was given the impression that current employment status, and general credit worthiness, of any Bridging Loan applicant, is unimportant, which sounded appropriate to me. What seems to be critical with such a loan, is the ‘exit strategy’. A plan in place from the outset, to repay the Bridging Loan, when the time comes to do so. I presumed, in my circumstance, that such an exit strategy, might be secured against the other half of the property that is due to me. Should I not be in a position to settle the loan, measures would be in place to sell the property, to settle any deficit. This is fine by me. I just want that 12 months of opportunity, to realise the potential of my 3 ventures.

I spoke to a company this afternoon, that I’d Googled, offering mortgages/bridging loans. They knocked back my hopes straight away, by stating that current/previous income is important with a BL, because the most likely exit strategy, if I was caught short, would be a mortgage. That has to be in place at the outset.

Whether this is just this companies’ policy, I don’t know, it’s the first I’ve tried so far.

So, I’m now asking on here, for some broader guidance on this.

Sorry for the long rambling post. Hopefully you can help me realise my aim, to have the chance to secure this long loved property.

Keep_pedalling

Bridging loans are intended for very short terms (months not years) and carry high interest rates and with no income other than benefits you will not be able to get one.You can’t use the house as collateral anyway as it seems it is still owned by the estate.

How much is the house worth and what is the total value of the estate? How near are you to completing probate?

T8T

https://forums.moneysavingexpert.com/discussion/comment/81995080#Comment_81995080

The house is worth in the region of £900-£950k. With all deductions taken into consideration of the entire estate, I'm due an amount of about half the house. The probate is nearing completion, afaik. The solicitors dealing with the probate (via order of the courts) are making moves to obtain the property. So I have until then, I guess. I'm going to see a solicitor soon, but I'll be restricted to a 'free' 30 minutes consultation. I can't afford more right now.

ac909045

The company is basically correct, bridging lenders care a lot about the exit strategy, and “future business income” usually won’t be enough on its own. In practice, they normally want a realistic guaranteed exit such as a mortgage, sale of the property, or other assets. Being unemployed and on UC will make it harder, especially if there’s no mortgage affordability in place already. You may still find specialist lenders willing to consider it if there’s substantial equity in the property, but you’d really need advice from an independent whole-of-market broker experienced in bridging finance and probate cases.

T8T

https://forums.moneysavingexpert.com/discussion/comment/81995094#Comment_81995094

Thanks for the glimmer of hope. I'll be trying more companies, including 'specialist lenders' in the next few days. It won't do any harm to try…

T8T

Are there any 'Specialist Lenders' that can be recommended?

poseidon1

Painful as maybe, OP would be best advised to revisit his previous thread in January below -

https://forums.moneysavingexpert.com/discussion/6648864/broke-m60-no-income-recently-due-inheritance-of-half-a-house-chances-of-mortgaging-the-rest

Since then there seems to be no material change in the OP's circumstances to justify any real hope of a commercial lender being interested in taking on this case on its 'merits'.

The only realistic exit from a bridging loan and keep the property, is a conventional remortgage based on substantial annual earnings, an important point highlighted in the previous post (for the amount involved, equity release does not appear to be a viable option )..

Bearing in mind this had already descended into a contentious probate matter with the associated legal costs , the OP really should be preparing himself for a sale of the property and moving on to something he can afford with his cash share, rather than delaying matters any longer and triggering a hostile forced sale of the property.

T8T

I am somewhat preparing myself for losing the property, poseidon1. The previous thread descended too much into finger pointing regarding my then planned business venture, which wasn’t welcome. I had got my sums slightly wrong with that one, I’ll admit, but I have sufficient confidence in the 3 ventures I have now planned, making close to £450k by the end of 12 months.

Moving on: it might help if I had somewhere to move to. A conventional rented property. Instead, without adequate funds, I fear I might end up being evicted, and end up in some ‘emergency accommodation’, where I won’t have the peace and space to work on my ventures productively. I’m then going to be severely compromised in any ‘race’ between the property remaining on the market unsold, and me becoming sufficiently solvent to qualify for that mortgage/loan.

elsien

I would also like to put in the radar that as a single person with no dependents and no stated disabilities then don’t hold your breath about the local authority giving you emergency accommodation.

I would suggest you read the LA housing allocations policy for your area. They are obliged to give information, not automatically house yourself on a rental property . And you will have adequate funds by then - you will have the money from the estate.

Back in January you referenced one venture that you believed would take off quickly - 4 months down the line, how is that going?

Keep_pedalling

So we are talking a large family home that is going to cost a lot to run. In your shoes I would be looking for it to be sold and use your share to buy something smaller, modern and far cheaper to run.

If, as is likely, you can’t raise the funds to buy out your sibling then the courts are going to force it on you anyway and the legal costs will be significant.

sammyjammy

Nobody is going to help rehouse you emergency or otherwise if you have 0.5m in the bank!