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Bridging loan

  • 05-09-2016 3:12pm
    #1
    c98bf0ca
    Registered Users Posts: 19 ✭


    Hi,

    Looking for some advice. We currently have a mortgage free property (recently valued at €350k) that we will be looking to put on the market next Spring. We are looking at properties in the €450-600k bracket for our new home. The sale of our current property will be providing the majority of the cash we will be using to fund our new purchase (along with some savings and as small a mortgage as possible). What I'm wondering is, is there any way a bank would lend us the majority/all of the money we would need to buy a new house with the provision that once the sale on our current property goes through we could reduce the mortgage by this sum (leaving a much smaller sum owing)? We would preferably like to start looking at new properties as soon as we can and would hate to miss out on the dream house because we didn't have the funds yet. Having to wait until our current house is sold will probably lead to a necessity to rent while we search for a property and we would like to avoid that if at all possible.

    Many thanks.


Comments

  • #2
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Unfortunately bridging finance is no longer available. You need to put your property on the market and at the same time look for a suitable property to buy. There is a shortage of properties to buy so selling should not be a problem. Once you have found a property and and a buyer ensure the c;losing date in the contracts for buying and selling are for the same day.

    This is done constantly for people trading up.


  • #3
    happyoutscan
    Registered Users, Registered Users 2 Posts: 6,069 ✭✭✭happyoutscan


    Trish56 wrote: »
    Unfortunately bridging finance is no longer available. You need to put your property on the market and at the same time look for a suitable property to buy. There is a shortage of properties to buy so selling should not be a problem. Once you have found a property and and a buyer ensure the c;losing date in the contracts for buying and selling are for the same day.

    This is done constantly for people trading up.

    Why or for what reason is bridging finance no longer available? I only ask as we were told the same today when we were looking for a year long bridging loan -using some of our deposit guaranteed investments as repayments when they mature in 2018 - to finish off our recently purchased house (no mortgage or loan involved).

    What other options - if any - are there with the exception of a mortgage I wonder?


  • #4
    phormium
    Registered Users, Registered Users 2 Posts: 3,345 ✭✭✭phormium


    Bridging fell out of favour big time many years ago, basically there is no guarantee a house will sell in the time frame or for the relevant amount, the bank have no idea what problems could crop up to cause sale issues. All decided on a policy of just not offering bridging anymore.


    Happyout- what you are looking for is more what was called a 'back to back' loan, secured against a maturing investment. Again these were common-ish but might have gone the same way as the bridging finance. Sometimes the bank can't take a lien over the maturing funds which effectively leaves them with no security really so that might be the first stumbling block, are the funds with the same institution? Even if they are they may have no way of actually tying them up to ensure the matured funds to directly to pay the loan.


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