« Back to articles
This article is for information only. It does not constitute advice. Chase Saunders Ltd does not provide services for savings, investments, mortgages or insurance. You should seek advice on these areas from a qualified financial advisor.
Be wary of bridging loans
Article Category: Debt Management Help and AdviceHomebuyers desperate to move homes should be wary of high-interest bridging loans, according to AA Legal Services.
James Molloy, from the organisation, says that although broken chains remain a "big issue" for homebuyers, they should take "appropriate advice" before taking out these types of loans.
Bridging loans are a way of allowing homebuyers to purchase a new property before selling their old home.
The loan, which is intended to be a short term solution and usually carries a high interest rate, is repaid when the previous house is sold.
Mr Molloy said: "My view on bridging loans are that unless absolutely unavoidable they should not be employed... if one is obtained as a last resort, it should only be used where the period is finite, i.e. after exchange.
"
Bridging loans should never be considered a routine factor in protecting a chain."
Broken chains are a constant worry for many people in the home-buying process, which is easier in Scotland - once a commitment to buy is made, it is legally binding.
In England people need to wait until after the exchanging contracts stage before finally being able to breath a sigh of relief.
For more information on debt management call our advisors on 08000 122 118 for FREE, no obligation help and advice. Created on 29/01/2008 12:42:09
Debt News
Debt News Archive