Bridging loan

scallywag

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Do banks do bridging loans at all these days? I'm not even sure I'm using the correct term here. I'd like to sell my current property (fully owned) and buy a new, more expensive one. I most likely have the difference in cash but I just can't face renting temporarily and moving twice.

I'm very fussy about what I'd like to buy so I have no idea when something might become available. But if it did I'd like to be able to pounce. The loan I'd need would be well above what my salary would allow, but it would be guaranteed by my current property. My current home is an apartment in the docklands, it should be very sellable.

Any info/tips on this?
 
No. Bridging finance isn't available.

Lots of posts from people in similar situation.

If you can't get a mortgage without selling current property, 1 idea is sell your apartment to an investor, renting it back while you're trying to close purchase of new place.

Another idea - tell bank you want to hold onto apartment as investment. They'll assume rental income. You might have enough to get mortgage you need. Then sell it as soon as you buy a place. Bank won't hold you to keeping it as investment.

Just some things I've seen work in practice. If you search the forum for recent "trading up" posts you should find a few.
 
If you can't get a mortgage without selling current property, 1 idea is sell your apartment to an investor, renting it back while you're trying to close purchase of new place.
I've seen this mentioned in a few threads and it sounds very appealing, as someone who's looking to trade up but doesn't want to rent a different house temporarily. Is this a common thing or just something that you could be lucky enough to fall into? Would it be the case that estate agents might happen to know of a few investors that are prepared to do it, or is this something that would somehow be arranged separately, directly approaching an investor? Where/how would someone find an investor like this?
 
Is this a common thing or just something that you could be lucky enough to fall into?
It can be difficult to arrange. The only one I've seen work in practice was half accidental in the end.

If it's the type of property that appeals to investors, it could happen by accident. Or you tell the estate agent your particularly interested in selling to an investor - some of the good ones (I know, I know - 'a good estate agent??!!') will have a list of people who are looking for that type of property.

But, if it's the type of property that would also appeal to owner occupiers, you don't want to eliminate the majority of your potential bidders.

Even if you don't rent it back, it can be sometimes a bit easier to have flexible closing dates with an investor vs someone who wants to move in themselves, if you're trying to line up both closing dates.
 
If you can't get a mortgage without selling current property, 1 idea is sell your apartment to an investor, renting it back while you're trying to close purchase of new place.
I'm not sure I'd like to pay the rent that would be due on my current place:D I'm lucky enough to have a good property already. But it's a valid option alright.

Another idea - tell bank you want to hold onto apartment as investment. They'll assume rental income. You might have enough to get mortgage you need. Then sell it as soon as you buy a place. Bank won't hold you to keeping it as investment.
Yes good point too, and in fact that's what I was going to do permanently, but now I'm considering a more expensive new property for myself so I think the mortgage just wouldn't stretch that far. Although I need to check - the banks were taking potential rental income into account alright.
 
I'm not sure I'd like to pay the rent that would be due on my current place
Not uncommon for owners to be shocked at how much their place could rent for!

One big attraction of owner occupied properties to an investor is there's no existing rent amount they're tied to under RPZ.


Although I need to check - the banks were taking potential rental income into account alright.
Criteria differs, but I think generally 75% of assumed rent is taken into account in affordability calculations.
 
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