We own our house apart for a tiny mortgage of £357 with Alliance and Leicester. The house was last valued 12 months ago by a reputable estate agent at £825,000. We wish to release £440,000 of equity on a 9-12 month short term loan to purchase a house we will ultimately downsize to. Once our current house is sold the full loan will be paid off. We do not wish to move from our current house for nine months due to the proximity of our daughter's school. Our current mortgage provider will not give us a further loan as they advertised as I was honest and told them we would being selling the house on which the further loan would be attached to in 9 months. The owner of the house we wish to buy would like to rent it off us for 9 months and we would not want to move in for nine months but the rental value of circa £1100 per month does not for fill the 125% of monthly mortgage costs criteria as requested by some buy to let mortgage companies. We have other properties owned out right but cannot release cash from these as they have sitting tenants,some businesses. My wife and I 's joint income is £100,000/ yr paye and a further rental income of £20,000 / year. The banking crisis of 2009 has made it seemingly impossible for either people starting out on the housing ladder of people like ourselves who have large equity in their house to borrow any money at all ! Can you help ? Richard.
This looks like a pretty straightforward case where a bridging loan would be the way to go. With regard to securing a loan on the new home, lenders would have an issue with you renting the property back to the current owners, as this falls under a different set of rules, plus the rental shortfall.
Also normal residential remortgage lenders wouldn't been keen to do such a short term loan, which would rule them out too.
There is sufficient equity in your current home to raise the full £440,000 and the exit strategy would be the sale of the property once you have moved into the new home. This is exactly the type of situation that bridging companies thrive on and the simple structure of what you're looking to do means that we should able to look at the most competitive rates available.
If you'd like to discuss your options in more detail, then please contact one of our consultants on 0344 346 3672 and they'll be able to give you a clearer picture of how we can assist you.
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