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Self Employed Couple Get A Bridging Loan To Buy Dream Home While Waiting For Chain To Complete

Self Employed Couple Get A Bridging Loan To Buy Dream Home While Waiting For Chain To Complete

£2.85m
Getting a bridging loan to fund a house purchase while waiting for an existing property to sell is one of the most common uses of bridging loans that we see day-to-day.

The Scenario

  • The couple had found a large country estate to buy but were waiting for their current home to sell before they could complete on the purchase
  • They were anxious that they’d lose the new property while waiting for the chain to complete if a cash buyer came in for the country home
  • Their current house had equestrian facilities, and it was proving difficult to sell because of this unique feature
  • They came to us for a bridging loan to secure the new home as cash buyers and bridge the gap between selling their current property
  • They planned to then pay off the bridge loan with the proceeds of their house sale combined with a residential mortgage on the new home

However, bridging loan providers were anxious about the equestrian facilities.

It could significantly delay the sale of their existing home, meaning they wouldn’t have the funds to repay the bridge on time.

The value of the bridging loan was also high at £2.85m, and so their bridging lender required surplus evidence that they’d be able to secure a mortgage on the new property after their sale had gone through.

The new home also threw up its own complications – it was a high acreage property (over 30 acres) which can be an issue for high street lenders, and the bridging lender knew this.

The Solution

  • Firstly, we prioritised using a bridging lender that we had a strong relationship with who would take a comprehensive view of the two unique properties involved – they could handle the equestrian facilities and the high acreage
  • We then contacted a standard mortgage lender to secure an agreement for the funds they’d need to refinance their bridging loan after the sale completed on their existing home
  • This gave the bridging lender peace of mind that the clients could repay the bridge through a residential mortgage despite the high acreage
  • Our broker also went the extra mile to get a mortgage agreement in place in the event that our clients’ property solder quicker than expected and they needed to move fast without the bridging loan, just in case

Success. Our clients were able to buy the new home at a cheaper price with their bridging loan because they were technically in a cash buyer position and didn’t have to wait for the chain to complete.

Once their existing property sold, we were there to help secure the longer term finance for their property and repay the bridge.

But this was a complicated mortgage application too.

  • Our clients were self employed running their own IT company, and we had to use both their salary income and the company’s net profits to reach the mortgage size they required.
  • The company was also growing every year and we needed to ensure the mortgage lender was comfortable with how the business operated.

Our mortgage adviser liaised with the clients and the mortgage lender to ensure they understood the potential of the company, their growth strategy and the sustainability of the company’s operations.

The mortgage we secured for our clients was:

  • A £1.6m mortgage
  • 2 year fixed rate term
  • At a low interest rate of 1.24%

A mortgage rate that our clients were extremely pleased with!

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