Bridging Finance

Are you looking to buy a new home but need a little extra time to sell your current property? Or perhaps you’ve found your dream home but need to act fast before someone else snatches it up? That’s where bridging finance comes in!

If you have strong equity in your existing property you might be able to get bridging finance. A bridging loan is a short term loan facility that covers the gap between the purchase of a new property and the sale of your existing home. It gives you the flexibility to purchase a new property before you’ve sold your existing property. It’s important to note that not all lenders offer bridging finance.

Bridging can also allow you to borrow more money than you otherwise could under normal circumstances (for a period of time – the bridging gap), this is because some lenders will assesses your maximum borrowing and ability to repay based on interest only repayments on the bridge/peak debt (existing loan balance, new loan balance and bridge loan balance) and then principal + interest on your residual/end debt (the amount you’ll owe once you’ve sold your existing property and repaid the existing debt and bridge).

Bridging loans only have a 6-12 month loan term depending on the lender. If you have not been able to sell your property within that specified time period depending on the lender this can be considered a default which means the bank may choose to step in to sell your property on your behalf, your broker will be able to discuss this with you in further detail.

In conclusion, bridging finance is a smart solution for home buyers who need a little extra time or extra funds to secure their dream home. With its quick turnaround time, flexible options, and straightforward process, it’s easy to see why it’s becoming an increasingly popular choice in Australia. So, if you’re ready to bridge your way to your new home, be sure to talk to your mortgage broker today!