£200k Bridging Loan to Secure New Home in Glasgow

What do you do when the buyer for your property falls through and you’ve already made an offer on a new house?

This case is an excellent example of using a bridging loan to solve the problem.

The Scenario

Our clients approached us, having committed to buying a new family home in Glasgow.

They’d initially planned to fund the move with the sale of their existing property but had been let down by several prospective buyers who had pulled the plug on their offers.

It had forced our clients into a situation where they needed to buy their new home before their current property had sold.

And they weren't able to get a conventional mortgage on the new property for the following reasons:

• They didn’t have the annual income to qualify for affordability on a standard mortgage that would cover the full property value
• They only needed finance for 12 months until their existing property sold

They needed specialist finance, and as they were purchasing in Scotland, there was also a reduced lending pool available to them.

The Solution

We managed to find a lender who could offer a 12-month bridging loan to our clients with no early redemption charges (ERCs) at a very competitive rate.

It allowed them to qualify for their lending capacity with the value of their capital assets instead of personal income.

And they had plenty of time to sell their property for its actual value, not having to drop the price for a quick sale.

In addition, having no ERCs on the loan meant there would be no charges to pay when they exited the bridge early upon the sale of their current property.

And we also encouraged the lender to use an online valuation for the new property so that only one physical valuation was needed, keeping costs and time to a minimum for our clients.

But most importantly, the bridging loan secured the property that they’d set their hopes on and that they’d already begun to envisage as their long term family home - and they could relax throughout the sale process of their old home with peace of mind.