Can someone please tell me how Bridging loans (uk) work?
we have a house that we need to sell but have found the perfect property would a bridging loan be able to help, and how much do they cost?
thanks
2007-05-31 21:33:27 · 6 answers · asked by sclodion 2 in Business & Finance ➔ Renting & Real Estate
Essentially it's a time limited, high cost, Mortgage 'extension' on your old house whilst you sell it.
For example you might be able to get 2 months for 2% of the sum borrowed .. so if the outstanding OLD Mortage is (say) £200,000, the Bridging Loan will cost you £4,000.
2007-06-01 00:07:00 · answer #1 · answered by Steve B 7 · 0⤊ 0⤋
I don't know how they work in the UK, but here in the US, a bridge loan is one rendered by a lender which will allow you to purchase the new home while the previous is still being sold. Most times, these bridge loans are at a fixed interest rate (a bit higher than the conventional mortgage rate), and require that interest only be paid until the previous home is sold. Once the previous home is sold, then a conventional mortgage can be taken.
The lender will require financial evidence that you are capable of making both the payment on the house which remains unsold, plus the monthly interest for the bridge loan.
2007-06-01 06:47:43 · answer #2 · answered by acermill 7 · 0⤊ 0⤋
A bridging loan allows you to borrow the money against your house. The whole lot. For example If you are selling a house and purchasing another one once the people buying your house have signed the contracts you can borrow the money against your house and pay for the other house and then when you sell your house you pay off the loan you have just borrowed. They are expensive but depend on how much you are borrowing.
For more information go here: http://en.wikipedia.org/wiki/Bridging_loan
2007-06-01 10:18:45 · answer #3 · answered by Hoodoo 3 · 0⤊ 0⤋
I think once you have a mortgage offer you can then ask the lender for a 'bridging loan' to pay the deposit on the property. I guess the interest might be high but it's something you'll need to find out from your mortgage lender. If you're looking for a mortgage I can highly recommend using moneysupermarket http://www.moneysupermarket.com/mortgages/
2007-06-01 04:52:50 · answer #4 · answered by Helen C 1 · 0⤊ 0⤋
it may sound like a good idea but it will cost you a lot extra a month and if it is from a company other than Bank or Building society you will be paying through the nose for years ..ask your bank the ways around this....i for instance put my mortgage on interest only for a couple of years for financial reasons and then back to repayment mortgage later...
2007-06-01 04:52:18 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Don't bother, they are VERY expensive
2007-06-01 04:34:51 · answer #6 · answered by the_whirlwind99 2 · 0⤊ 0⤋