When bridging finance is the best mortgage option

Posted on 3 February 2010 by christine wright

Hi, my partner owns his house outright and is valued at about £290,000. We wish to purchase a larger house and wondered if there is any way we could release equity in order to pay for a new property currently on the market for £220,000. My partner is self employed and his gross earnings are roughly £28,000 per annum. Any ideas?

It is possible to release the equity in the existing property and you have a choice of ways to do this. 

If the intention is to sell your partners property, then you can arrange what is known as bridging finance.  This is a short term loan secured on the existing property, which literally bridges the gap between the purchase of a new property and the sale of the existing one.  Due to it's short term nature and because the amount borrowed often bears no relation to your income, the interest rate and fees on this type of loan can be quite high.

As an alternative to this, you may wish to consider keeping the existing property and renting it out.  Depending on the anticipated rental income, you partners personal circumstances and the value of the property, you could then arrange a buy to let mortgage on it and use the funds to purchase the new property.

I suggest that you seek independent mortgage advice about your situation as soon as possible.


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.

You are currently offline. Some pages or content may fail to load.