Bridging Finance problems : (

Viewing 3 posts - 1 through 3 (of 3 total)

redwing
Participant
@redwing
Join Date: 2003
Post Count: 2,733
February 3, 2005 - 12:53 am
Hi All,
No not me , but a friendwas saying he is now stuck in a bridging finance problem..
yesterday he started paying interest on both loans;
1- his ex-PPOR he has up for sale
2- His new PPOR
His ex-PPOR (P1) he has moved out of now and it has been on the market at around $200k for 2 weeks, the house is about 85yrs old, sub-dividable block and he purchased it for around $120k.
His new PPOR (P2) was also around $200k and is about 20mins away.
he is a young married guy with 2 kids (6 & 2 yrs.
He thinks he has about 2 months before he has the loans called in.
Does anyone else have any other ideas ????
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Derek
Member
@derek
Join Date: 2004
Post Count: 3,544
February 3, 2005 - 12:59 am
Hi Redwing,
Not a broker but has he considered setting up LOC/equity loan using free (if any) equity in property number 1 and then drawing payments from this.
Obviously this isn’t cosher as per guidelines but the issue seems to be greater than this.
The easier option would be to take a ‘honeymoon’ if he is ahead of schedule with repayments and/or speak to the lender and see if they will allow interest to capitalise on the loan while it waits to be sold.
If he is cross collateralised then it is possible that his available equity levels may not be as great as it seems.
Derek
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pfsfinance
Member
@pfsfinance
Join Date: 2004
Post Count: 171
February 3, 2005 - 3:36 am
A couple of lenders have what they call a go-between loan for people in this situation. With this loan you only need to make payments on the existing property and the interest on the new property can be capitialised for 6 months allowing you time to sell the existing property.
Loans are at standard variable and they will go to 85% lvr on both properties. Subject to the area the properties are in.
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W: http://www.pfsfinance.com.au
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