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| *Ostroff, Fair and Company>>>Renting & Real Estate |
We have bought a house but haven't sold our own yet. Just how hard is it to get an open-ended bridging loan? |
We have five weeks to sell. We haven't concluded missives yet though and our solicitor is trying to re-negotiate entry to a later date. Our flat has been on the market for 4 weeks, some interest but no offers yet. We have put it on from today at a low-end fixed price. We have the option to withdraw if it doesn't sell but really don't want to! We could sell the flat in the next week or two but it's a guessing game. Any advice? A similar thing happened to me a couple of years ago in August 2004 - a couple put an offer in on our house, we accepted and immediately went out looking for a house ourselves and ended up with a new one - the missives were put through very quickly on the new one and unluckily for us the people pulled out of buying as they had not sold their own house. We then had to put it up for sale again, by this time it was late September and the market had slumped. We ended up having to sell it for 拢10k less than we'd budgeted on the previous offer as we were desperate and we could only get a bridging loan if we had completed missives on the sale. In the end we had a bigger mortgage and a bridging loan for 3 1/2 months. Paying 2 mortgages and a bridging loan at the same time is hell. Now we have had to move again as we couldn't afford the dream house after all that bother. If you don't get any luck this week with purchasers I'd consider pulling out of your purchase - as I said it's hell. It sounds like you are in the UK, so the available loans maybe slightly different. In the US if you do not have a contract on the property you are selling, you take a Home Equity Line out on that property and apply the money toward the down payment of the new house. You should look for a loan with closing costs as low as possible, since it hopefully will be a very short term loan. You also need to make sure that you can qualify for both loans. Advice, Don't do it. Bridge loans are high interest and risky. You stand a chance on losing what you are living in. If you were totally sure your place was going to sell, that would be a different story. Loan agents really don't care if you make a desperate risky loan, they just want your money at any cost. I/we have made a couple of bad loans, should have waited. Debt is very easy.Do not get a bridging loan,try and delay the purchase on the new place and quickly put your flat up for auction with a sensible reserve on it so you do'nt let it go below it's real value.If you do'nt want to do that,drop out of the new one until you have sold the flat.You will in effect be paying 2 mortgages and a bridging loan which would be very expensive.If you can afford it,go ahead but "buyer beware". |
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