Your Next Home Loan

But haven’t sold your existing property yet? A Bridging Loan can help. While most buyers try to coordinate the selling of one property before the purchase of another, it doesn’t always work out that way. Bridging finance is designed to help home buyers and investors manage this gap.

For many, it’s a lifeline that takes some of the stress out of changing addresses. How does bridging finance work? There are a number of ways bridging finance can be of value to buyers. You may require funds for a short period of time to bridge the gap between a new purchase and sale of your existing home.

To facilitate this, the bank would take security over your existing and new property and provide you with a short-term loan. When your old property is sold, the bank applies the proceeds of the sale to the Bridging Loan, and any funds still owing become the mortgage on your new property. Bridging finance is usually available for terms ranging from a few weeks up to 12 months.

How much will it cost? Depending on your circumstances, most lenders will either capitalise the interest during a period of bridging finance so there are no scheduled repayments, just a lump sum payment at the end, or will require scheduled interest-only repayments. This makes bridging the gap between buying and selling property, easier for those unable to carry two mortgages at the same time.

Do I qualify? Your application for bridging finance will be submitted to the lender and assessed accordingly. Your loan serviceability (ability to repay the loan) will be based on your capacity to repay the end debt. The end debt is any remaining loan balance after your existing home is sold and the sale proceeds have been applied to the Bridging Loan.

The Innovative Home Loans team can guide you on other available options to make the next move a smooth & quick process!