Borrowers’ home secures a bridge to buy at auction
Although bridging loans are often used to assist with the purchase of properties at auction, the property being purchased does not always have to be taken as security for the loan. The following is a good case in point.
Our borrowers, a retired couple, had purchased a Grade II listed farmhouse at auction and had a short time in which to complete or forfeit their deposit. They intended to split the auction property into two dwellings, one to reside in and one as a holiday home to provide additional income.
They had originally intended to sell their home to fund the purchase, but a long time interested buyer had pulled out leaving them with a requirement for short term bridging finance.
Fortunately, our borrowers had plenty of equity in their home, the sale of which of course was also providing the exit, and given complications surrounding the farmhouse and the tight deadline, the Bank took only the borrowers’ existing home as security.
Head of Bridging at United Trust Bank, Alan Margolis, commented “In my experience, very often parties become fixated on the property which is the subject of the transaction, rather than looking at the broader picture. Here, it made sense to put the purchase property to one side and focus on the borrowers’ current home which provided perfectly acceptable security on its own, as well as a suitable exit.”
Loan Amount: £247,900