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Bridging loan

Hi All,

Probably a simple question but I am confused by bridging loans. My situation is such that my property for sale hasn't sold and I wish to purchase another property before the sale will complete. The new property is 370K, mortgage arranged. I was planning a deposit of

70K. Do I therefore need a bridging loan of 70K (rather than 370K!). Then once my original property sells simply repay the 70K? What would my mortgage provider on the new property think of the deposit as effectively another loan i.e. a loan for a loan? Any suggestions appreciated.

thanks

Mark

Reply to
Mark Hula
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................................................................................................................. Check with your mortgage provider - some will not let you have 2 mortgages at same time. (I am assuming that you have a mortgage on existing property). Eric

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Reply to
Eric Jones

Ok thanks.

Am I right though that I only need a bridging loan for the deposit and not the whole amount?

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Reply to
Mark Hula

You've not given us enough information.

Your plan would presumably have been to sell the old house, pay off the old mortgage and use the balance as a deposit for the new house. You may also be introducing some additional money, or using some of the money from the old house for moving expenses and so on.

Once you have this information, you will be able to work out how much money you will be short by if the old house doesn't sell.

You will also need to look at whether you will still be able to get the new mortgage if you have another mortgage. It will probably put you over the income multiples, but they might not bother if it is just for a few weeks.

Reply to
Jonathan Bryce

In message , Mark Hula writes

Not enough info, but I reckon you will need a bridging loan of £370k which you probably wont get unless you have exchanged contracts to sell your existing property OR your income is sufficient to cover a mortgage of £370K plus your existing mortgage.

Your new mortgagee will have a clause somewhere saying that your existing mortgage must be repaid.

If you havent exchanged contracts then DONT even think about a bridging loan. It will end in tears.

Reply to
john boyle

"john boyle" wrote

Are you sure?

When I bought a new house a few years back, I hadn't sold my old house. I read the T&C for the new mortgage loan very carefully, and there was no mention that I had to pay off the existing mortgage first (it was with a mainstream bank).

[The new bank did know about the existing mortgage, though.]
Reply to
Tim

In message , Tim writes

Only if the new lender wants you to repay it - it depnds on what you can afford so it doesnt always want you to. I have seen one or two cases in which the requirement wasnt in the offer but was in the instructions to solicitors.

Fair enough.

Reply to
john boyle

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