Bridging Home Loan

Thanks to a Bridging Home Loan, selling your old home and buying a new one no longer needs to be a nightmare for home owners. The biggest frustrations people have when selling their home is that the property will take too long to sell after they have found their new home of their dreams. Or, the home will sell too quickly before they have had time to find their new home. That’s where bridging loans and bridging finance are perfect.

Like its name suggests, a Bridging Home Loan is designed to bridge the gap between you buying a new home and selling your old home. In other words, bridging finance simplifies the transition between buying and selling homes.

Here’s how a Bridging Home Loan works

Lenders will assess the amount of equity you have built up in your existing home (the one you’re selling). For people who meet their criteria they may agree to lend the entire purchase amount of the new property (including fees), for up to 6 months. That means home owners have up to six months to sell their existing home. It also means there is no need to spend months renting after they have sold their old home before they find a new home. Nor does it mean missing out on that beautiful new dream home because their old home is taking its time selling. No missed settlement dates. No slashing selling prices on your own home. No crazy stress.

With some Bridging home loans, lenders offer borrowers the opportunity to capitalise interest payments which means, you don’t even need to make repayments on two mortgages (which can be crippling to the budget).

Bridging home loans are also great for people building a new home too. It gives you the opportunity to stay living in your old home while your new home gets built. There’s no need to endure the pain and expense of rental accommodation and double moving during the transition.

Bridging Loans: The Downside

1.  Obviously, while you have a Bridging Loan you have debt on two properties which means interest is accruing on a large amount of money. If your old property takes a long time to sell that could leave you with hefty interest to repay.
2. To qualify for Bridging finance you need to have a substantial amount of equity available in your existing home so not all people qualify.
3. Bridging home loans are often offered at a higher interest rate so they can be costly.

Most lenders offer bridging finance yet their interest rates and terms and conditions are all different. Not only that, bridging finance isn’t the right finance solution for some borrowers. There may be better choices. Make sure you speak with an experienced Wealth Concerns mortgage broker to see how Bridging finance best suits your situation.

Contact Us

If you would like to discuss your specific circumstances call us on 1300 700 496 or alternatively text your name and number to 0411 320 962 and we will call you.