What is a bridging loan
Have you found that new property or maybe are looking to construct that new house however need to sell your existing property first? Bridging loans are a short-term finance product that can help you with your endeavours. Depending on your individual circumstances, bridging loans may allow you to borrow sufficient funds to assist you purchase or construct that new house plus meet all associated costs which can even include the interest expense for the bridging loan in certain circumstances.
Normally bridging loans are repaid from the sale of your existing house within a reasonable time frame normally 6 months. The structuring of bridging loans will need to reflect the available equity in your properties and the amount to be cleared from the sale of your existing property and if required a separate home loan is normally available for any long-term debt which is not to be repaid from the sale of your property subject to the lenders normal credit criteria being met.
Bridging loans are not without risks which can include having to service a higher level of debt until you sell your property, the inability to sell your existing property within agreed time frames or even a downturn in property market conditions. In this regard it is important to ensure you have the right lender who understands your circumstances and can work with you to achieve your desired goals.
