Are you concerned about how you’re going to finance your new home if your old home doesn’t sell in time? You've found the perfect new home but you’ll need to sell your existing home first, well don’t stress as there is a solution known as a bridging home loan.
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.
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.
Once they’ve finished, you move in and then put your old home on the market.
Bridging Finance, 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.
Our professional mortgage brokers can help you learn more about bridging home loans and whether it is the right option for you, so give us a call to discuss your options today.