Could a bridging loan help get you into your new home sooner?

If your family circumstances have changed, or you’re looking for a change of scenery, you may be considering buying a new home.?

So what happens if you buy your next home before you sell your existing one? You could negotiate with the buyer for a flexible settlement date or it could be worth considering a bridging loan.

A bridging loan is a short-term loan that can help ease the transition from one home to the next. It enables buyers the chance to secure a new home before selling their current one and usually come with anywhere from a three-12-month term.

Who is suited to a bridging loan?

So how do you know if a bridging loan could be right for you? An ideal bridging-loan client would have a decent amount of equity in their current home, a good level of income and a good level of savings.

The reason for this is that you would need to take on a very large short-term loan. The banks generally want clients with plenty of equity to help reduce the risk and enough savings to meet the loan repayments for at least six months.

Preparing for all outcomes

When clients come to me looking to upgrade their current home and are potentially interested in a bridging loan, one strategy we can consider is to give them the best of both worlds.

We look to get a bridging loan pre-approval that allows them to purchase first and then sell. We then go and get them a loan assuming they buy and sell simultaneously. By giving the client both options, we’re putting them in a strong position to buy. This strategy isn’t right for everyone, so we will speak with you about your particular circumstances to determine the right option for you.

If you’re interested to know whether a bridging loan could work for you and want to ensure that you’re in a strong financial position to make your property goals happen, I’m your dedicated guide throughout the process. Reach out to me today.