Buying a new home before selling your existing one can be stressful, but a bridging loan helps ease the transition. This short-term loan covers the purchase price of your new home while you wait for your current property to sell.
Pros of Bridging Loans:
- Convenience: Allows you to buy your next home without needing to sell first. This can help with the marketing of the new home and allows you to have open homes without having to live in the home.
- Avoid Rushed Sales: Gives you time to get the best price for your current home rather than rush to the market
- No Need for Temporary Accommodation: You won’t have to move twice or rent in between homes.
- Interest-Only Payments Available: Some lenders offer interest-only payments during the bridging period.
- Ability to lock in the purchase now: A lot of vendors don’t want you to sign a contract ‘subject to the sale’ of your current home, being able to lock in the purchase prior can help you secure the purchase.
Cons of Bridging Loans:
- Higher Interest Rates: Bridging loans often come with slightly higher rates than standard mortgages.
- Short-Term Financial Pressure: If your current home doesn’t sell quickly, you could face increased financial strain.
- Additional Loan Fees: Some lenders charge extra fees for setting up and closing the bridging loan.
- Strict Eligibility Criteria: Not all borrowers qualify, as lenders assess affordability based on owning two properties temporarily.
Bridging loans can be a great solution in the right circumstances, but they require careful planning. Need expert advice? We’re here to help!
Book a fee free, obligation free time with Tara or Maryanne and they can guide you through the figures specific to you, your bridging options and what other options may be available to you
Book here – The Team
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