300k for 3 months
Discussion
New build house on the horizon. Have two properties to sell and will sell property 1 before Xmas.
The other one I need to keep for about 3/4 months after the new house is ready and then complete on property 2.
Once I am in the new house I will be mortgage free but for the 3/4 months overlap which needs to happen I need 300k that is tied up in sale number 2.
Is it best to take a interest only mortgage with no repayment penalties or would a bridging loan be better or should I be doing something differently??
I can’t tie the sale of property 2 to the new build so I need to find a way of funding it short term.
Any ideas?
The other one I need to keep for about 3/4 months after the new house is ready and then complete on property 2.
Once I am in the new house I will be mortgage free but for the 3/4 months overlap which needs to happen I need 300k that is tied up in sale number 2.
Is it best to take a interest only mortgage with no repayment penalties or would a bridging loan be better or should I be doing something differently??
I can’t tie the sale of property 2 to the new build so I need to find a way of funding it short term.
Any ideas?
interstellar said:
New build house on the horizon. Have two properties to sell and will sell property 1 before Xmas.
The other one I need to keep for about 3/4 months after the new house is ready and then complete on property 2.
Once I am in the new house I will be mortgage free but for the 3/4 months overlap which needs to happen I need 300k that is tied up in sale number 2.
Is it best to take a interest only mortgage with no repayment penalties or would a bridging loan be better or should I be doing something differently??
I can’t tie the sale of property 2 to the new build so I need to find a way of funding it short term.
Any ideas?
What is the equity in the two properties that you currently own?The other one I need to keep for about 3/4 months after the new house is ready and then complete on property 2.
Once I am in the new house I will be mortgage free but for the 3/4 months overlap which needs to happen I need 300k that is tied up in sale number 2.
Is it best to take a interest only mortgage with no repayment penalties or would a bridging loan be better or should I be doing something differently??
I can’t tie the sale of property 2 to the new build so I need to find a way of funding it short term.
Any ideas?
Presume the £300k is the new build costs including land price?
May be helpful to put down a time line so we can understand the timing issues and come up with ideas from there.
Initial feeling is that an interest inky mortgage with no penalty May be more cost effective than a bridging loan - especially if the bridging loan is seen as open ended i.e. repayment from sale of property not guaranteed.
Equity 750k when done
New build is not a house I am doing it’s a new build on a development at £630k
Property 1 will sell before Xmas £350k equity
New build will be ready March/April so need to pay £630k.
Property 2 should also have been sold by then and will complete July/august, 400k in that one.
I know a bridging loan can be upto 1 year or I read that somewhere.
Need the 300k March-July.
New build is not a house I am doing it’s a new build on a development at £630k
Property 1 will sell before Xmas £350k equity
New build will be ready March/April so need to pay £630k.
Property 2 should also have been sold by then and will complete July/august, 400k in that one.
I know a bridging loan can be upto 1 year or I read that somewhere.
Need the 300k March-July.
Thanks for info.
In that scenario then if you can then a mortgage with no penalty on the new property would be what I would do.
In fact, it is what we did when we bought our current property.
Obtained mortgage on new property and used savings for the balance. Did up new house and 3 months later sold old house to clear mortgage.
Had to be a bit creative with what we told mortgage company (ie planning to rent out old property) and we the advantage that the interest rate was low as my wife worked for said mortgage company.
Bridging loan rates are likely to be higher.
Other issue will be the fact that IIRC you may have to pay more stamp duty initially pending getting a rebate from HMRC.
In that scenario then if you can then a mortgage with no penalty on the new property would be what I would do.
In fact, it is what we did when we bought our current property.
Obtained mortgage on new property and used savings for the balance. Did up new house and 3 months later sold old house to clear mortgage.
Had to be a bit creative with what we told mortgage company (ie planning to rent out old property) and we the advantage that the interest rate was low as my wife worked for said mortgage company.
Bridging loan rates are likely to be higher.
Other issue will be the fact that IIRC you may have to pay more stamp duty initially pending getting a rebate from HMRC.
interstellar said:
Equity 750k when done
New build is not a house I am doing it’s a new build on a development at £630k
Property 1 will sell before Xmas £350k equity
New build will be ready March/April so need to pay £630k.
Property 2 should also have been sold by then and will complete July/august, 400k in that one.
I know a bridging loan can be upto 1 year or I read that somewhere.
Need the 300k March-July.
Assuming you’ve considered CGT on the properties which aren’t your main home? New build is not a house I am doing it’s a new build on a development at £630k
Property 1 will sell before Xmas £350k equity
New build will be ready March/April so need to pay £630k.
Property 2 should also have been sold by then and will complete July/august, 400k in that one.
I know a bridging loan can be upto 1 year or I read that somewhere.
Need the 300k March-July.
Gassing Station | Finance | Top of Page | What's New | My Stuff