Filling In Your Finance Gaps With a Bridging Home Loan
Coordinating the sale of your current home with the purchase of a new property can be complex, and for some people create considerable pressure. One way you can minimise pressure, including not being forced to sell your existing home at a lower price, is to use a Bridging Home Loan.
A Bridging Home Loan is a temporary loan providing financial cover which allows you to buy or build your new property before you sell your current home. This enables you to buy the property you want, without being held back by any lengthy sales processes.
Picking the Right Loan Product
The right loan product will depend upon a number of factors, such as:
- How long are the funds required for? Is this known?
- Do you have an unconditional contract on the property you are selling? Or are you yet to sell?
- Is your new home being built – a new home?
- Are the properties for investment or primary residence/s?
- What is your ability to service or meet the repayments on your current loan and the bridging loan?
Bridging Home Loan Available Options
The number of options available to you and the amount you will be able to borrow are often dependant on your specific situation. This is often because different lender’s rates and offers will often reflect the risk involved for the lender.
You might however be surprised by just what’s available in the market.
Need Help or More Information on Bridging Home Loans?
Your local mortgage broker can help you work out what bridging home loan options are available to you and even help you negotiate a better deal with your current lender. Simply call us on 13 LOAN (direct on +61 2 9249 3739) or email us the form on this page and we will return your contact within 2 business hours.
Advantages and Disadvantages of Bridging Loans
| Pros | Cons |
| You can complete the purchase of a new property before selling your existing property. | Until your existing property sells, your interest payments will keep adding up. |
| You may be required to have sufficient equity in your current home to support the purchase. | |
Getting Pre-Approval For Your Bridging Home Loan
Getting pre-approval for your bridging home loan will give you added confidence during the buying and selling process. It will give you a clear indication of how much you can spend before you purchase the new property. This not only serves to alleviate your stress but also helps to avoid situations where you have to sell your property at a low price because of time constraints.
However, you should bear in mind that the amount you can borrow will be dependant on the amount your lender values your home at, not the price you have it for sale on. Bridging home loans can be complex and you will find that you have numerous options; to better understand these options talk to your local mortgage broker.
More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local area mortgage expert, contact us on 13 LOAN (direct +61 2 9249 3739)
