There are many instances when you might find yourself in a situation where you need bridging finance. Bridging finance or a bridging loan is the name given to a loan that is intended to create a ‘bridge’ from one property to another.
When to consider bridging finance
You may need a bridging loan when you have a purchased a new property but not yet sold your existing residence or if you are building a home and wish to remain in your existing residence until the new home is completed. A bridging loan is intended to enable someone to purchase a new property without having sold their existing property. Remember that a bridging loan is not intended to be a long term arrangement and the lender may often put restrictions in place such as a limited timeframe for the borrower to sell their home.
“Bridging finance may have additional costs.”
A bridging loan may seem like a good option to enable someone to purchase a new home without having sold their existing home, but you should be aware that there are often additional costs and charges associated with this type of finance. The lender may also choose to charge a higher rate of interest so you need to be certain that you are capable of servicing all of the debt before you take on this type of finance.
I hope you find this information useful and remember that I am here to discuss any aspect of finances, so please call our office on 9417 5550 to make an appointment today.