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What kind of Loan??

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  • 05-02-2014 12:58pm
    #1
    Shad0w
    Registered Users Posts: 135 ✭✭


    Hi, I have an interesting issue.

    My wife and I are interested in purchasing a property, this is a derelict building and would need to be "done up".

    The property's purchase price is 40,000.

    We are selling our own home and what we want to do is get something like a bridging loan to buy the property and pay it back out of the money from the sale of our home, then use the rest of the money from the sale to pay back our existing mortgage and renovate the new house.

    Would you be able to advise me on what kind of loan would suit me best or what bank/lending facility would be easiest approach?

    Also can you advise me if I get a personal loan to purchase this property, then sell my own home and pay off my mortgage. Could I then get another mortgage on my new property to renovate the house?


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    #2
    rahenyrover
    Registered Users Posts: 222 ✭✭rahenyrover


    Very few banks are offering bridging these days. And any that are would only be offering closed bridging. In other words unconditional contracts must be signed for the sale of existing property.

    As for your second question you could get a personal loan but again you will find it very difficult to get any bank to approve an unsecured loan of 40k so that probably won't be a runner.

    If you did buy it you could get a mortgage on it then which the bankay agree to offer you based on a % of the value in repair. (The value after works are carried out) but again this is rare these days.

    An option may be to carry a second mortgage of 40k to buy the property and use the surplus from the sale to carry out renovations. Again though you may encounter problems with this too, even though the loan will be small most banks will not take on a security in such disrepair. It just doesn't make commercial sense. There's not much money to be made on such a small mortgage and the risk and costs associated with repossession if things went pear shaped just means they are not interested.

    Sadly as you can see there are very few options available to you. More a sign of the times than what you are proposing to do.

    Best of luck with it, hope you get sorted.


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