Trading Up: Will we need to get bridging loan

J

Justbmad

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Hi,
We want to trade up to our dream home which has just come on the market near where we live. The house is €440,000. We owe €140,000 on our house valued €300,000.With the €160,000 remaining we would need to get new mortgage of €280,000 in order to have enough. Would we get a mortgage for €280,0000 in todays climate (currently we take home approx €55,000 a year total with 2 working, both 37 with 3 kids).
Would we also need to get a bridging loan to secure buying the house until our own sells, is this expensive & could we possibly rent out our own house until it sells to pay for the bridging loan
 
Justbmad said:
Hi,
We want to trade up to our dream home which has just come on the market near where we live. The house is €440,000. We owe €140,000 on our house valued €300,000.With the €160,000 remaining we would need to get new mortgage of €280,000 in order to have enough.
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Stamp duty and legals will be €25k plus imo.
 
Bridging loans are probably very difficult to get these days, since property is taking so much longer to sell. If you are able to get one, it'll almost certainly be much more expensive to reflect the greater risk in current market conditions.

If you can afford to sell your property significantly below* the current asking prices in your area and still complete the transaction, with all the usual legal fees, stamp duty, plus the cost of servicing the loan for at least six months, then - and only then - should you consider it, in my opinion.

*Since some of the few buyers out there are paying well under asking prices, that could easily be 30% or more below asking prices for comparable properties.

Bridging loans are very useful in a market with good transaction volume and speed: I've used one myself, and only had the loan drawn down for a couple of weeks. The downside is that you could be horribly exposed in a market where houses are not selling. Based on the details you've posted, I wouldn't take the risk in your situation.
 
I agree with dreamerb, that nowadays getting mortgage loan is not easy at all. Well not far ago i have also got a bridging loan through my agent.
 
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