Unfortunately, not all circumstances can be ideal. What do you do if you haven’t sold your current home just yet, complete with its own mortgage loan? You may quickly lose hope, but countless homeowners across the country turn to the bridging loan option.
In these instances, getting the timing right should be your top priority. Anything less could cause you to miss your settlement deadline. You may also fall prey to lowball offers, all because of time constraints.
A bridging loan is essentially a special type of loan, typically short-term. It’s designed to cover the purchase price of your second property, thereby allowing you more time to sell your existing home. This covers the mortgage payment, thereby providing you with the opportunity to safely walk through the intimidating gap between buying and selling.
To learn more about bridging loans, we’ve created this quick and easy guide for you to follow:
Why invest in a bridging loan?
Bridging loans are built to address all gaps, making them the most convenient option for your current needs. It ensures you can purchase your dream property, all without the pressure of selling your current home as soon as possible.
You’ll also have access to good repayment options, as you can easily structure your loan according to your preferences. During the period between purchasing and selling, you’ll only need to make repayments on your existing mortgage.
What are the requirements needed to apply for a bridging loan?
When it comes to applying for bridging loans, keep in mind that certain requirements need to be taken into account. It’s a specialized type of loan, meaning that you will need to meet certain criteria and considerations before applying. Here are some of them:
- Maximum loan terms: This means that your current home needs to be sold in 6 to 12 months, which is what the bridging loan can only offer.
- Maximum LVR requirements: This pertains to the amount you need to deposit, which could be up to 25 per cent. Keep in mind that you may also be asked to provide proof of a minimum level of equity in an already existing home.
- Inability to redraw facility on the bridging loan during the term: Any company or strata title purchases will be prohibited.
Achieving Your Dream Home
Depending on your current mortgage situation, you may find yourself quickly losing hope—your dream home may quickly be sold. Thankfully, a short-term bridging loan allows you an easy and convenient way of accessing cash during the sales process of your existing home. In doing so, you attain your dream home—all without having to worry about financial and time constraints.
If you wish to pursue a bridging loan in Sydney, Wealthy You has you covered. We are an Australian mortgage company, servicing clients across the area for a decade. We offer you various mortgage products, all tailored to meet your financial needs. We make your dream home simple to achieve—reach out to us today to learn more.