Bridging loan?

dufferlover

Right, wise ones, I'm hoping someone may be able to advise.

So, we are moving home, in with my mother, who lives alone (I'm an only child). We currently own a house and have just had it valued. On current market value, we stand to make at least €160,000 profit on it. Happy days.
However, the house we are moving in to needs work. No major works, just modernising, a couple of walls knocked. In all we are proposing to put €100,000 in to it and that figure is including contingency.

I don't want to live in a building site so I want to get the work done on the house and move in when it's as good as complete. I don't have €100,000 lying around the place so what I'm asking is - can I go to the bank with the valuation of our place, look to borrow €100,000, spend it on the rennovation and clear said loan when our place sells. Is this a thing? What sort of product am I looking for from the bank?

I hope I'm making sense! TIA

Bandana boy

Sure
Set up a meeting with your bank to discuss.
You can expect to pay about ~7.5% interest on an unsecured loan.
Depending on how long the building work will take it might be cheaper to get a hotel or rent close by.

dufferlover

Bandana boy wrote: »

Sure
Set up a meeting with your bank to discuss.
You can expect to pay about ~7.5% interest on an unsecured loan.
Depending on how long the building work will take it might be cheaper to get a hotel or rent close by.

Thanks for that. I'm going to get in contact with the bank this week. I agree that renting would probably be easier but we currently have a tiny mortgage so to rent would cost us about three times a month extra compared to what we're paying at the moment. We also have two young kids so it would just be easier to do one move. We are estimating a 12 week turnaround on the rennovations, barring problems.

MAJJ

Hi,

Just to check a few things:
You have bought the new house already?
You have not sold your own house?

dufferlover

MAJJ wrote: »

Hi,

Just to check a few things:
You have bought the new house already?
You have not sold your own house?

We are not buying the new house. And no we have not sold our place yet. We had it valued this morning.

The_Conductor

Duffer- honestly- there are very few lenders who will do bridging finance these days. Your proposal is messy on a few different grounds- aka you can't secure a 100k loan on your home to do work on a property that you don't own- and you're not going to get a 100k loan- without security.

Honestly, and I know its not what you want to hear- but living in the property while you're getting it done up- is probably what you're going to have to do- unless you want to make some sort of a deal with a local hotel/guest house- and store your belongings (U Store or similar) while the renovations are ongoing..........

Bridging finance- is not available in the manner in which it once was- but do ask about it anyway...........

pwurple

The_Conductor wrote: »

Duffer- honestly- there are very few lenders who will do bridging finance these days. Your proposal is messy on a few different grounds- aka you can't secure a 100k loan on your home to do work on a property that you don't own- and you're not going to get a 100k loan- without security.

Honestly, and I know its not what you want to hear- but living in the property while you're getting it done up- is probably what you're going to have to do- unless you want to make some sort of a deal with a local hotel/guest house- and store your belongings (U Store or similar) while the renovations are ongoing..........

Bridging finance- is not available in the manner in which it once was- but do ask about it anyway...........

They may end up doing a small variable mortgage on either property instead, making sure the ability to pay it all off in one go is there.

Sounds like the mums house is mortgage free, and they have 160k equity in the other.

dufferlover

pwurple wrote: »

They may end up doing a small variable mortgage on either property instead, making sure the ability to pay it all off in one go is there.

Sounds like the mums house is mortgage free, and they have 160k equity in the other.

This is exactly what our situation is. My mother's place is mortage free, we are proposing putting 100,000 in to it. Then should we make €160,000 on ours we we would be left with €60,000.
Would getting my mother to sign her house over to us make it more seemless? She has no issue doing that. What does that process involve and what sort of tax will we be liable for?

ace_irl

dufferlover wrote: »

This is exactly what our situation is. My mother's place is mortage free, we are proposing putting 100,000 in to it. Then should we make €160,000 on ours we we would be left with €60,000.
Would getting my mother to sign her house over to us make it more seemless? She has no issue doing that. What does that process involve and what sort of tax will we be liable for?

The tax implications will depend on the value of your mothers home. You can inherit up to €310,000 from a parent tax free.

When a house is given to someone else its seen to be sold at the market value regardless of money actually passing between the two individuals.

If it has been your mothers principal private residence then she should not be liable to any capital gains tax on disposal and if the market value of her home is below €310,000 you should not be liable to any capital acquisition tax.

You should speak to an accountant or tax adviser before making any decisions on that though.

dufferlover

ace_irl wrote: »

The tax implications will depend on the value of your mothers home. You can inherit up to €310,000 from a parent tax free.

When a house is given to someone else its seen to be sold at the market value regardless of money actually passing between the two individuals.

If it has been your mothers principal private residence then she should not be liable to any capital gains tax on disposal and if the market value of her home is below €310,000 you should not be liable to any capital acquisition tax.

You should speak to an accountant or tax adviser before making any decisions on that though.

Cheers, for that. I seriously doubt it's worth €310,000. Nice site already but house is all over the shop, in terms of modern day living. It may be easier to do it this way.

myshirt

Costs are too prohibitive at that level op.