Can we get a loan on home to buy a new one and pay when we sell?

Posted on 26 June 2013 by Jaine


Can we get a loan on home to buy a new one and pay when we sell?

We have a home worth £800k (owned outright) which we wish to sell but have found a house we want to buy now for £200k. Can we get a home loan against ours which we would then pay back once it is sold please?

Jaine,

From the nature of your enquiry, it sounds like you are looking at a bridging loan. Unlike conventional mortgages, bridging loans are primarily about the asset and the exit strategy, rather than your ability to meet a monthly financial payment.

With the values involved, it should be relatively straight forward to arrange a loan for the £200k to be taken out on your existing home, and then repaid upon the sale.

There are wide variety of bridging lenders with many different rates, also as bridging loan rates are higher than their residential counterparts due the different nature of the loan, getting the right advice is vital. There are also a number of different ways that they calculate the monthly rolled up interest, which can add cost to the whole sceanrio if you choose the wrong one.

I'd say it's definitely worthwhile having a discussion with one of our consultants who can go through your enquiry in more detail and explain the options to you. If you'd like to arrange a convenient time then please let me know.

Regards,

Simon

simon.collins@johncharcol.co.uk

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