Bridging Loan Services in Australia
Purchasing a house in Australia? Taking out a bridging loan could help you buy your next home while waiting for your current one to sell.
What is a Bridging Loan?
A bridging loan, also known as bridging finance, is a short-term loan that can assist you in financing the purchase of a new property while selling your current one.
Most people sell their old home first and then use the equity from the sale to purchase their new home. There are times, though, when it may be better for you to buy first.
How Does a Bridging Loan Work?
A Bridge Between Your Current & Future Homes
The bridging loan functions as a “bridge” between your existing mortgage and the new ongoing loan you’ll use to buy your next house. Depending on your circumstances, a bridging loan’s operation may vary slightly. When you purchase your next home, you begin making payments on both the bridging and your ongoing loans. The remaining balance of the home bridging loan will be paid off when you sell your current property, and you will then continue to pay back your ongoing loan.
Decide How to Arrange Your Bridge Loan
Depending on whether you have a fixed or variable rate home loan, there are a few options for setting up your bridging loan. You can obtain a bridging loan in addition to your current loan with a fixed-rate home loan, keeping the payments for each loan separate. If your mortgage has a variable rate, you can refinance your current mortgage into a bridging home loan.
Get up to 80% of the Property’s Value as a Loan
You might be able to borrow as much as 80% of the cost of the new home. Your bridging loan is created by combining the additional lending required to assist you in purchasing your next home with your current loan balance.
Only Pay Interest on the Bridge Loan
You may make interest-only payments during the bridging period (up to 12 months), then make the final principal and interest payment on the bridging loan. You can set up principal, interest, or interest-only repayments for your ongoing loan on the new property, pending approval.
Exploring Different Strategies to Fund Your Next Property Purchase
Bridging Finance
This option enables you to acquire a new property, offering you a grace period of up to 12 months to sell your existing residence.
Simultaneous Sale and Purchase
This strategy orchestrates settlement to occur within a few hours for both properties, allowing the equity transfer from your current residence to the new one.
Transform Your Current Home into an Investment Property
With this approach, you can utilise the equity in your present home to cover the deposit and acquisition costs of your new property. Then, you secure a loan to finance the remaining amount.
Rent-Back Arrangement
Under this scheme, you sell your property and then negotiate a deal with the new owners to lease it back while you search for another home to purchase.
Our Bridging Finance Process
Tailoring Your Financial Strategy
We kick off the process by understanding your current financial status and needs. We’ll discuss different finance options for your new home, helping you make an informed choice based on your situation and objectives. You’ll need a realistic understanding of your current home’s market value and potential selling time.
Securing Your New Home
After finding your dream home, you’ll sign the contract of sale and deposit the agreed amount. Remember, the terms of the contract will vary based on your chosen finance approach, and due to the involvement of two properties, allow for extended time for loan approval and settlement.
Initiating Your Home Loan
We’ll review your financials in detail, and discuss the workings of your home loan and the steps involved in your chosen finance approach.
Loan Approval and Document Signing
This phase involves waiting for the lender’s approval – a process that usually takes two to seven business days. We’ll keep you updated throughout. Once approved, you will need to deposit a further amount with the real estate agent and sign the loan documents.
Settling into Your New Home
Your solicitor and the bank will take charge of settlement for your new home. After this, you can collect your keys and begin the moving process.
Finding a Buyer for Your Old Home
Collaborate with a reputable real estate agent, get professional property photos, and list your old home for sale. Remember, most banks give you up to 12 months from your new home’s settlement date to sell your old one.
Final Debt Clearance
After selling your old home, get in touch with us to discuss repaying your outstanding debt, utilising any surplus funds, and ensuring all settlements are conducted timely.
Locations We Serve
Sydney
Brisbane
Gold Coast
Melbourne
Adelaide
Canberra
Darwin
Hobart
Launceston
Let Us Help You!
We can help answer your questions at no cost and there’s no pressure to our approach. We’ll also provide the most up-to-date information and data available.
We help our clients updated with pertinent information and help in the factors that they need. We don’t just provide comparison tools for our clients, we cover the entire gamut of the finance world. We also have a wide range of loan products that will be a valuable asset.
Contact Zanda Wealth Mortgage Brokers about how you can get your bridging loan today!
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