What is a Bridging Loan?
Are you thinking about moving to a new home? With a bridging loan you may be able to find a favourable solution to your financial requirements with the help of a finance broker in Sydney. A bridging loan is a short term that allows you to purchase a new home before selling your old one. This loan streamlines the process of moving, preventing you from struggling with the pressure of collecting enough funds to buy a new place.
Definition of Bridging Loan
The bridging loan enables you to purchase your desired property without having to wait for selling your old home. Selling your old home can take time which keeps you tied to a ticking clock that can take your dream away from you at any time. The bridging home loans in Sydney, provides you funds to purchase a new home which will later be covered after selling your old home.
How Bridging Loans Work?
The working of barging loans is extremely simple and helpful at the same time. They support you financially in buying a new place when your old place hasn’t been sold yet. These are short-term loans because of how fast the market moves. The lender offers you more than 100% of the value of your new home by using the equity of your old one. After the loan is sanctioned, the lender usually sets a time period of six months for the return of the loan payment with the help of a finance broker in Sydney.
Benefits of Bridging
Bridging loans offer a number of benefits if you are considering purchasing a new home. These loans allow you to:
- Quickly take action in a busy market, even before selling your old home.
- Do not worry about finding temporary stays or high living costs.
- Feel assured that you can purchase the home without waiting to sell your old home.
Being aware of all the favourable conditions and the benefits of these home loans in Sydney allow you to make a well informed decision when considering moving to a new place.
Process of Buying Before Selling
Choosing bridging loans means you can purchase a new home without waiting to sell your old home, which will give you enough funds. Waiting to sell your old home may result in losing the new one you desire to live in.
A bridging loan takes the pressure off of your shoulders by providing enough fundings to purchase your next home. The amount of loan can be covered as soon as you sell your old home which will not take much time as the mast moves very quickly.
Applying for a Bridging Loan
A few steps are involved in acquiring a bridging loan. The documents required for the bridging loans are the same as any standard loan, such as:
- Income documents.
- ID
- Bank statements
- Contracts of sale
Time to Sell Your Existing Property
After acquiring a bridging loan, a lender usually gives you a time period of six months to sell your old home and repay the loan. However, the time duration can also be extended in some cases with the help of a finance broker in Sydney.
Pros and Cons of Bridging Loans
Bridging loans enable you to manage your financial needs during the time of shifting homes. mentioned below are some of the Pros and Cons of acquiring bridging loans.
Advantages of Bridging Loans
The major advantage you get by acquiring home loans in Sydney under bridging home is the instant availability of cash you get in order to manage your financial needs while moving from your old home to a new one. It gives you a chance to have enough funds to buy your dream home before you lose it to someone else. It allows you to move faster without waiting too long for the sale of your old home.
Drawbacks of Bridging Loans
Everything has its own downsides. Even though the bridging loan provides you with instant and more than enough findings to purchase a new home, the time period to repay the loan holds much higher interest rates than other loans. Some lending institutions do not require you to make payments for bridging loans. Instead, they add the interest rate to the loan every month. However, this also puts less pressure on you as you only need to make the repayments for the end debt. It is a great method to avoid mortgage prison.
So, if you are considering moving to a new place, follow the effective tips to choose a mortgage lender, contact the best finance broker in Sydney and easily navigate your way to your dream home.
