Bridging Home Loans: How to Prepare
Sometimes people find their next dream home before they are able to sell their existing one. While this may pose some financial challenges, there are ways to effectively handle such a situation.
Bridging home loans allow you to secure a new home loan while still paying off your existing mortgage. Typically, these kinds of loans will incur interest-only charges during your bridging loan period.
Having a chat with your mortgage broker can help you determine how this strategy will work for your exact situation, but there are a few tips to get you started.
Preparation is the best advice for anyone seeking a bridging loan - the more specific information you have to begin with, the better chance you can find one suited to you.
For example, do you know how long these funds will be required for? Essentially, lenders need to know if you have an unconditional contract on the property you are selling or if you have not been able to sell just yet.
What is your ability to meet the repayments on your existing loans as well as the bridging loan?
Your lender will take security over both properties and lend against these assets until the sale and purchase process on both is completed so it is important that you are prepared for this financial commitment.
To get more detailed information on your situation, talk to a Loan Market mortgage broker today.