Bridging Loan

M

marimurp

Guest
The sale of our house has just fallen thru but the house we are buying will be closing soon - can we get a bridging loan even if no contracts (for the house we are selling) have not been signed yet - we intend to sell? Is there any other options? the mortgage offer letter condition is the sale of our house or unconditional contracts signed
 
Where is the house located? You should be able to sell quite quickly at a reasonable price in the current market. In my experience, most properties in the major cities will attract some sort of reasonable offer within a week or two of going on the market.
 
It is located in North Dublin - even if we have a reasonable offer in 1-2 weeks - contracts will still not be signed and the new house will be ready to go - the condition of mortgage for new house is to sell exisiting house or have contracts signed - do you think they would give still give us the mortgage and bridging loan
 
marimurp said:
- do you think they would give still give us the mortgage and bridging loan
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....this is a broad based question. The answer does depend upon your financial position, earnings, currents debts, credit history etc Are you in a position to pay off both loans?

ninsaga
 
my myself and my husband are both in permenant jobs with a good wage - i think we could pay off both the loans! i have no loans but my husband does. we have a small amount of savings and we both have ssia aswell. what i am most worried is the condition for the mortgage - that contacts have to be signed or the property sold - depending when the new house will be ready (estate wont give any indication except that it is nearly ready!) we might not be able to met these conditions
 
From my own recent experience, and considering you have been approved for mortgage, a bank should be able to give you a bridging loan on up to 90% of the equity tied up in your existing property.
It might be best to get the bridging loan, and arrange a payback date with interest, of for example 4 months time. There will obviously be a few grand interest, but you have the added advantage of being able to search for the best offer for your property as opposed to being "up against the wall".
You could also stall the first payments on your new mortgage by a few months, so as to release pressure in the interim.
Get a written valuation from your EA, and approach the bank, with all the figures on the table, from there it's about agreeing the best rate on the bridging loan. We got 5.5%, if that's anything to go by.
 
Marimurp, I can't imagine that the bank would want to miss out on your business! If I was you I'd talk to a couple of banks, some are more forthcoming than others. At the end of the day, you seem to be a very "secure" customer!
 



Hi

Not wanting to pour water on you here, but from what I've seen in the industry, banks have become less willing to provide bridging on the sale of a house, where there is no sale contract in place.

The expectation of getting up to 90% LTV on the house being sold, with no sale contract in place is a bit rich imho (although could be down to specific circumstances) & will be costly so expect to pay significantly more than traditional homeloan interest rates !

Cheers
 
Only trying to feedback my own experience which is in process. 5.5% suited us, along with getting 90% LTV. No amazing circumstances, so I would still advise marimurp to explore the possibility, seeing that you've only "poured water" and not suggested an alternative
 
marimurp said:
- the condition of mortgage for new house is to sell exisiting house or have contracts signed - do you think they would give still give us the mortgage and bridging loan
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If the condition of mortgage is the sale of existing house or signed contracts, why do you ask if you will get the question ?
 
You'd need to show sufficient income to cover both mortgages and the bridging finance for an indefinite period. 'Open' bridging - where no contracts for the sale of the old property exist - is fairly difficult to get. If your new mortgage is with the same lender as your current house you should explore this with them ASAP.

Sarah

www.rea.ie
 
frando said:
If the condition of mortgage is the sale of existing house or signed contracts, why do you ask if you will get the question ?
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sorry, Meant to say "Why do you ask the question". Anyway, banks dont like bridging loans but afaik they will give you one if you take out your new mortgage with them. They also charge higher than normal interest rates because they are greedy.Oops Sorry! meant because they are working only on a 3/6 month loan.
 
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