Looking for advice on bridging loans.

P

Paul O Mahoney

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This will probably cause a giggle or an amount of eye rolling most will think I've finally lost it.

We found a house we would seriously consider our retirement home for 600k , an hr from Dublin and 90mins from Airport.

Right now our liquidity is good and have 240k in quickly realised assets , with another 50k, that is available.

Our present home has 500k in equity and future cashflow (3 yrs after tax) 220k .

We want out of where we are and would sell but as a keen gardener spring would be optimum, banana trees and ferns don't look their best in Winter.

We want to buy the other house for cash we have the income to cover outgoings, and I have not included my wifes bonus paid in march and that's 60k plus but she pays her AVC to limit from that.

So, question is there still anyone in the market that would extend 300k over 6 months, or 12 with the option of settling early.

A scary story for Halloween.
 
If you want to buy this house, then go ahead and buy it with an ordinary mortgage.

Put your house on the market immediately. Waiting until the spring is not a good idea.

When your current home is sold, then repay the mortgage.

By the way, get a cash back mortgage, so it won't cost you anything.

Brendan
 
Aye aye bang bang, we're in our 50s Brendan and the thoughts of applying for a loan in a shrinking market is not something we want.

This is a liquidity issue our l/t assets are there, our s/t assets are stated above as our m/t assets.

In my mind its simply a hurdle to jump, and I would be the cautious type, but this is feels right and our requirements are simple.

I appreciate we would pay a higher interest rate for 6/9 months and that's manageable , this is about 3 years early btw but the financial strategy was/is no debt by 60, ( herself the main earner) and a good pension pot .....which will happen, but this house has arrived on the market.

If this was 3 years hence we'd buy it and sell this and not a bother, its timing that has us a bit hysterical.

But that's why I asked if the concept of bridging was still a thing in the market place.

And I do appreciate your advice but we have been outbid, had bids accepted for similar properties only to be told the owner " has changed their minds "
 
Gordon Gekko said:
You could buy it as an investment property and borrow from someone like ICS/Dilosk.

Then just pay it back when you sell your own.
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It's the whole mortgage thingy though and I'm trying to avoid stress.

But thanks I'll have look tomorrow and see what's on offer.
 
Why do you think that the mortgage involves stress?

I think you are overdoing it. Plenty of people in their 50s apply for a mortgage and get it.

In your situation, you are applying for a 15 year mortgage but it is your intention to clear it in 6 months.

I am not suggesting that you take out a mortgage and keep it for 15 years.

Of course, if your earnings don't support a 15 year mortgage, then you will have to try Gordon's workaround. Take out an investment mortgage which is not subject to the same earnings restrictions.

Brendan
 
I am almost 70 yrs. We could rustle up €800k but need an extra €200k to buy a property. There is no lender available to lend us the €200k despite the fact that this €200k would be cleared on the sale of our own home within months.

We are an older couple trying to downsize and release all our unused bedrooms to a younger couple with family.

But it's all about "carbon" these days......
 
If you are downsizing to a property costing a million, your existing property is probably worth a lot.

If that is the case, put your current house value and ages into Sprys calculator, if you qualify for the €200k, it might be an option worth looking into further.

https://www.spryfinance.ie/think-it-through/lifetime-loan-calculator/

€200k @ 4.95% would be around €850 monthly in interest, there would also be a loan set up fee of €1.5k and presumably some legal fees. Early repayment charges normally apply but not if you sell.

Is it an option ?
 
IsleOfMan said:
I am almost 70 yrs. We could rustle up €800k but need an extra €200k to buy a property. There is no lender available to lend us the €200k despite the fact that this €200k would be cleared on the sale of our own home within months.
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Have you considered a life loan?? You could probably release a big chunk of equity in your current home to use in the purchase of your potential new home.

The life loan becomes repayable on the sale of your current property so it should all work nicely (in theory) for you if everything was wrapped up in 6 months

Edit: oops, crossed with @twofor1
 
twofor1 said:
If that is the case, put your current house value and ages into Sprys calculator, if you qualify for the €200k, it might be an option worth looking into further.
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That is a brilliant idea. However, I suspect that Seniors Money would not approve of it. They have a detailed process to make sure that the Life Loan is suitable for the borrower.

Brendan
 
Paul O Mahoney said:
It's the whole mortgage thingy though and I'm trying to avoid stress.

But thanks I'll have look tomorrow and see what's on offer.
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What do you think a bridging loan is?

No one is going to lend you €300,000 without underwriting the risk that they would be exposed to. You are going to have to jump through the hoops if you want someone to give you that amount of money.
 
Do what everyone else has to do...sell your home first. Then you won't need a loan from the bank.

Couples and families have to do this all the time.
 
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