Bridging Loans - Property Purchase

[ChimpMaster]

I'm assuming they will use the property as security.

9% is not unreasonable for bridging loans. I have seen 6% to 12%+ as a range normally.

Personally I'd be keen to release equity from your main residence (or other investments) to pay back the bridging loan ASAP, i.e. I wouldn't rely on a sale completion to repay the loan.

[SimonMac]

Selling off at the end to pay off the loan and then remortgage.

Selling off the old place or the new place?

Haven't you got any equity in any of your BTL? or is your view of "owning" property being mortgaged up to the hilt and trying to keep up with repayments

[MrMarkyMark]

Haven't you got any equity in any of your BTL? or is your view of "owning" property being mortgaged up to the hilt and trying to keep up with repayments

What's wrong with that, they are only going to go up, in value, after all

[SimonMac]

What's wrong with that, they are only going to go up, in value, after all

If they only go up in value you should have some equity already then!

[WTFH]

You'd be best to ask a property magnet on here. I remember a few months ago a guy called MF claimed he was a millionaire from property. He'd be a good one to ask.


But as long as you have a repayment mortgage and are reducing your debt, you shouldn't have a problem. If you're up to your eyes in "interest only" mortgages with no way of paying off apart from selling, then you're taking a big risk where the only solution would be a bridging loan. I hear Wonga are quite good these days.

[d000hg]

You'd be best to ask a property magnet on here.

Ha.

[WTFH]

I knew I'd read it somewhere...


http://forums.contractoruk.com/gener...ml#post2133258

[AtW]

9% sounds about right.

Remember, it's a bridging loan, eye watering rates, just off M4...

[MarillionFan]

Selling off the old place or the new place?

Haven't you got any equity in any of your BTL? or is your view of "owning" property being mortgaged up to the hilt and trying to keep up with repayments

Plan was, to buy the new property outright. It needs work doing to it & needs extending, so a budget of around 100k-150k would turn it into an incredible property. It sits on a 3 acre plot, has a separate office building & loads of potential to add to it over the years. It's also incredibly underpriced for the area and what it is.

As it's a repo, we've been told they want cash buyers only, so I immediately went in at 20k over the asking price, I reckon it will go at least 100-150k over the asking price, as it's that much undervalued.

So I'd keep our existing house and stay up in Hampshire while the builders are on it, with a view to move in the summer and either rent my place out and take an income from for 6 months or so, before selling it, then porting the mortgage back over to the newly done up house which would be worth more than it is now & keep my ridiculous <1% mortgage I have now and then have all of the cash back in the bank for other things.

Anyway, I have the highest offer in right now, but having seen it earlier, done up it would be worth 1M, it's up for half of that, so I reckon it will be picked up by a developer with deeper pockets than me.

[56samba]

I had about 100k equity in house 1 and a .99% mortgage from HSBC, took out a second 80k mortgage on house 1 at about 1.2% to pay for house 2 deposit, house 2 mortgage with Northern Rock for the remainder. lot cheaper than a bridging loan. Fixed up house 2, moved in, sold house 1 and paid off the 2 HSBC mortgages.