Could the person at the top of our chain take a bridging loan, to stop the developer putting the house back on the market ?
Posted on 22 June 2014 by Sharon
We have virtually completed the purchase of a property; however we have now heard that the developer of new house ( top of chain) is threatening to 'pull the plug' on the purchaser of that property and put the house up for sale for another £25.000, unless all of the chain move within seven days. This deadline is impossible. If required could the purchaser apply for a bridging loan for approx 4 weeks and what are interest rates likely to cost. Thank you.
On the face of it, there's no real reason why the person at the top of the chain couldn't get a bridging loan. However this is a fairly expensive form of lending, and the rate would depend on the loan to value they'd need.
Typically bridging companies will lend upto around 75% of the value of the property, and there is usually a percentage arrangement fee (say 2%). The rates do vary a fair bit between the different companies, and it may be that they'd have to sacrifice the best rate, for the quickest lender. Rates could typically vary between 0.65% to 1.15% depending on LTV.
If they'd like to talk in more detail, then they can contact one of our consultants on 0344 346 3672 and they'll be able to give them a more exact idea of how we can help.
More than mortgages, talk to me about: Financial Protection | Investments | Personal and Corporate Pensions | Home Insurance General Insurance | Valuations | Conveyancing | Wills | Home finders
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.
John Charcol is a trading name of John Charcol Limited and its Appointed Representatives. John Charcol Limited is authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 665649. Registered in England No. 9157892. Registered office address for John Charcol Limited is 5th Floor, Cutlers Exchange, 123 Houndsditch, London, EC3A 7BU. The FCA does not regulate some investment mortgage contracts. Calls may be recorded for training and monitoring.