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Property Purchase Dorset with State Pension

The retired carpenter client sought financial assistance to facilitate a next-time property purchase. He has built substantial wealth over his lifetime, with assets including his unencumbered primary residence, valued at £565,000, and his unencumbered investment property, worth £425,000.

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Bridging Loan Case Study – Property Purchase Dorset with State Pension

Area: Dorset
Capital Raised: £275k

Client Background

The retired carpenter client sought financial assistance to facilitate a next-time property purchase. He has built substantial wealth over his lifetime, with assets including his unencumbered primary residence, valued at £565,000, and his unencumbered investment property, worth £425,000.

The Scenario

The client required a bridging loan of £275,000 to purchase a new home priced at £500,000.

The Challenges

Several obstacles complicated the client financing:

  • Income Constraints: His only income source was his state pension, making traditional lending difficult.
  • Urgent Purchase Timeline: The property purchase required fast funding, also ruling out conventional mortgage applications.
  • Property Sale Dependency: His repayment strategy relied on selling his investment property, which was currently vacant and awaiting sale.
  • High Moving Costs: Legal fees, moving expenses, and property transition costs added to his financial burden.

The Solution

A Fast Track Fixed Bridging Loan was arranged with the following terms:

  • Loan Amount: £275,000
  • Term: 12 months
  • Interest Roll-Up: No monthly payments are required; interest added to the loan
  • Lender & Legal Fees: Added to the Loan
  • Legals – Dual Representation Legals
  • Exit Strategy: Sale of investment property and primary residence if necessary

 

Implementation Process

The loan application was processed efficiently to meet the client’s purchase deadline. The key steps included:

  • Financial Assessment: A detailed financial review was conducted.
  • Loan Structuring: Risk discussions and alternative exit strategies were evaluated.
  • Property Valuation & Underwriting: The investment property and new home were valued to confirm feasibility.
  • Legal Documentation: All necessary legal agreements and lender approvals were completed.
  • Loan Disbursement: The loan was approved and released in time for the property purchase.

 

The Outcome

  • Successful Property Purchase: The bridging loan enabled the client to complete the transaction as planned.
  • Property Sale in Progress: The investment property was listed for sale and expected to repay the loan within the 12-month period.
  • Financial Stability: The fixed interest rate provided cost certainty, avoiding unexpected financial burdens.

     

Conclusion:

This case study highlights how a bridging loan can provide quick, flexible funding for individuals in unique financial situations. The client’s case demonstrates the importance of structured financial planning, alternative repayment strategies, and an efficient loan approval process to meet urgent property needs.