Bridging Loan

In message , Ade Murphy writes

Bridging loans dot exist, per se, unless you have exchanged contracts by on both transactions by the time you need it. If you have done so, then expect 2+ over base rate plus lots and lots of fees and legal requirements with charges on both properties (assuming the underlying transaction is a sale & purchase of properties) , because the lender aint going to make any real dosh from interest in only 10 weeks.

These days the expression 'Bridging loan' seems to be used solely by estate agents trying to flog houses, and they use the expression in a way that makes clients think they are commonly available and 'run of the mill'.

In over 30 years I have only ever found one person who asked for a 'bridging loan' who really needed one.

Its a bit like asking for what you think is the prescription when you should be telling us the symptoms so that a proper diagnosis can be made and the appropriate medicine prescribed.

Why do you need a 'bridging loan'?

Don't be such a fuddy duddy. Everyone knows what a bridging loan is.

It's a facility which lets you borrow against the security of a 2nd property in addition to the "normal" mortgage borrowing on an existing "1st" property, with the usual "income multiples" restriction, and probably the LTV too, being relaxed (temporarily waived) on the basis that the 1st loan will be repaid soon, and the other loan will then be within the limits.

For "open" bridging, the rate is ~ 1% to 1.5% per MONTH and up to 70% - 75% LTV, and no income restrictions, IIRC.

In message , Ronald Raygun writes

I didnt say nI didnt know what one is, just that they arent as common as Estate Agents make out.

PLUS a second charge on the first property and two 'solicitors undertakings'.

I don't understand why estate agents would make that out, seeing as they seem to concentrate their efforts on the herculean task of creating chains, which of course do away with the need for bridging loans.

Understandable if two lenders involved, but unnecessary if not.

to do what?

Its only when the links dont meat that they then say 'get a bridging loan!'

I assume you mean when the 'bridger' isn't the 1st mortgagee on the first property. Most mortgage lenders wont 'bridge', generally only clearing banks and fringe lenders will do it and they rarely have the

1st mortgage on the existing house. Even existing mortgagees will usually need to amend their charge to some extent to satisfactorily pick up the extra advance which is also secured on the new property.

To send the sales dosh to the bank and to use the advanced dosh for the purpose of the purchase of the new property and to hold all the deeds etc., to the bank's order. These are sometimes used in lieu of formal charges.