Posted on 31 May 2010 by Bal
I currently have a residential mortgage. I am trying to buy another house below market value before the auction date. I will sell that house after couple of months.
Would BTL mortgage or bridging loan be suitable to buy this house?
Based on the information given, it seems to me that a bridging loan is more likely to be the solution. The interest rate payable is likely to be higher than a Buy to Let mortgage rate, but the set up fees could well be lower and whilst you may have to pay 30 days interest on closure they would probably be no additional early repayment charges payable.
If, as stated, you are intending to sell the property in the near future, you should find out why the property is being sold at auction and why the vendors are willing to consider selling at below market value. The last thing you want to happen is to be saddled with a property you can't sell and a mortgage debt that needs servicing.
I recommend that you speak to an independent mortgage broker about your plans and how best to finance them.
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