When you are looking to purchase another property before selling your current one, you may need to consider borrowing money until your current property sells. This is often referred to as bridging loans
Do you want to move location, upsize or simply secure your dream property without having to wait to sell your existing home? In the right circumstances, bridging loans can help with the transition from one home to another. We’ll discuss how they work to help you consider whether this type of loan might be right for you
In some cases, clients are not sure of what they want until some of the possibilities or ideas they have are brought to life as potential scenarios. We will inform and educate you on what might be possible in securing your financial future, and go through the advantages and risks of each scenario to help you make an informed decision, with a clear idea of how to manage things going forward
Bridging Loan, key considerations
In some cases, people may find it more difficult to sell their existing home than they had previously anticipated, meaning the interest they end up paying on the bridging loan builds up considerably. Some applicants may also find they don’t quite have sufficient equity in their homes to qualify for this type of loan.
Benefits of bridging finance
You can purchase a new property without having to sell your existing property first. If you’re building a new property, you can remain in your existing home until the new one’s ready. A bridging loan term of up to six months (12 months if your home is being constructed) could buy you time to sell your home.
How does Bridging Home Loan work?
A bridging home loan can simplify the transition between properties and enable you to purchase your new home while waiting for the sale of your existing one to be settled. It generally works by covering your financing requirements if the sale and purchase settlement dates of your properties differ.
Length of Bridging Home Loan
Bridging finance can sometimes be available for periods of up to 12 months. Repayment requirements will vary depending on the lender, but in most cases payments will be interest-only.
You may even not be required to make any repayments during the interim period, but it is always wise to do so to keep your loan obligations in check.
When can I use a Bridging loan?
Bridging loans are an excellent option in a number of circumstances when moving, whether it is to an existing property or for anyone wanting to build a new home.
It saves you the hassle of having to move into temporary rental accommodation and then have to move all over again when the new home is built. This is not only painful and expensive, but it can be avoided as a bridging home loan lets you stay in your own house until your builder completes it.
Bridging Loan Packages
There are three main Bridging Loan options:
• Normal Loan – pay off debt when completed.
• End Debt Bridging Loan – You will need to sell with a specified time, with up to 12 months to do so.
• No End Debt Bridging Loan – have maximum of 9 months to sell so must be confident of selling otherwise can be risky. One the key things to consider is how saleable is your current property.
Apply for a home loan
We will assist you to apply for a bridging home loan. In the application process, we’ll assess lending criteria such as income, your mortgage repayment history, other loans and financial commitments.
We may complete a property valuation to work out how much your current home is worth. If your application is approved, you’ll receive a letter of offer and loan contract for the new home loan.
You don’t need to shop around, G-Force Finance Solutions will do all the legwork for you. We are your one stop finance solutions shop. We offer a wide range of loans from the banks and other lenders. We’ll help you compare your current loan to all the loans on our panel, helping you find the one that’s just right for you saving you lots of time, and potentially thousands of dollars.
Visit our Loan calculators today and take the next step by clicking the “Quick Quote” Button and our finance advisors will then get to work on sourcing you a tailor made Home Loan package from our trusted panel of lenders and will work tirelessly to get you the right solution.