Construction & Bridging Loans
Bridging the Gap: A Guide to Australian Bridging Loans
Have you ever found your dream home but haven't sold your current one?
Year :
2024
Mont Clair Capital
Have you ever found your dream home but haven't sold your current one? A bridging loan is a short-term financial solution designed to "bridge the gap" between the purchase of a new property and the sale of your existing one. It provides you with the funds you need to buy your next home without the stress of a rushed sale.
How Bridging Loans Work : The 'Capitalised' Process
A bridging loan is a temporary loan that consolidates the debt from both your old and new properties into a single facility for a short period.
Consolidated Debt: The loan amount is a total of your new property's purchase price plus any remaining mortgage on your old home.
Capitalised Interest: The interest on the bridging loan is not paid on a regular basis. Instead, it is "capitalised," meaning it is added to the total loan balance. This is why borrowers often make no repayments during the bridging period.
Final Repayment: The loan is paid off in full from the proceeds of the sale of your original property. The goal is to sell your old home quickly to end the bridging loan period.
Why It Works This Way : Flexibility and Opportunity
The core purpose of a bridging loan is to give you time, flexibility, and certainty.
Secure Your New Home: It allows you to buy the new property when you find it, rather than waiting for your old home to sell and risking missing out.
Avoid a Fire Sale: Without a bridging loan, you might be forced to sell your current property quickly at a lower price. This loan gives you the freedom to hold out for the best possible price.
Key Things to Know :
Loan Term: Bridging loans are short-term, typically lasting from 6 to 12 months.
Higher Interest Rates: Due to their short-term and high-risk nature, bridging loans often have a higher interest rate than a standard home loan.
Lender Requirements: Lenders will carefully assess your exit strategy and financial position. They need to be confident that you can sell your existing property within the agreed-upon timeframe.
Types of Bridging Loans:
Open Bridging Loan: This is when you have not yet found a buyer for your existing property. This loan is considered higher risk and has a shorter term.
Closed Bridging Loan: This is when you have a signed contract of sale for your existing property. It's considered much lower risk and often comes with better terms.
More Projects
Construction & Bridging Loans
Bridging the Gap: A Guide to Australian Bridging Loans
Have you ever found your dream home but haven't sold your current one?
Year :
2024
Mont Clair Capital
Have you ever found your dream home but haven't sold your current one? A bridging loan is a short-term financial solution designed to "bridge the gap" between the purchase of a new property and the sale of your existing one. It provides you with the funds you need to buy your next home without the stress of a rushed sale.
How Bridging Loans Work : The 'Capitalised' Process
A bridging loan is a temporary loan that consolidates the debt from both your old and new properties into a single facility for a short period.
Consolidated Debt: The loan amount is a total of your new property's purchase price plus any remaining mortgage on your old home.
Capitalised Interest: The interest on the bridging loan is not paid on a regular basis. Instead, it is "capitalised," meaning it is added to the total loan balance. This is why borrowers often make no repayments during the bridging period.
Final Repayment: The loan is paid off in full from the proceeds of the sale of your original property. The goal is to sell your old home quickly to end the bridging loan period.
Why It Works This Way : Flexibility and Opportunity
The core purpose of a bridging loan is to give you time, flexibility, and certainty.
Secure Your New Home: It allows you to buy the new property when you find it, rather than waiting for your old home to sell and risking missing out.
Avoid a Fire Sale: Without a bridging loan, you might be forced to sell your current property quickly at a lower price. This loan gives you the freedom to hold out for the best possible price.
Key Things to Know :
Loan Term: Bridging loans are short-term, typically lasting from 6 to 12 months.
Higher Interest Rates: Due to their short-term and high-risk nature, bridging loans often have a higher interest rate than a standard home loan.
Lender Requirements: Lenders will carefully assess your exit strategy and financial position. They need to be confident that you can sell your existing property within the agreed-upon timeframe.
Types of Bridging Loans:
Open Bridging Loan: This is when you have not yet found a buyer for your existing property. This loan is considered higher risk and has a shorter term.
Closed Bridging Loan: This is when you have a signed contract of sale for your existing property. It's considered much lower risk and often comes with better terms.
More Projects
Construction & Bridging Loans
Bridging the Gap: A Guide to Australian Bridging Loans
Have you ever found your dream home but haven't sold your current one?
Year :
2024
Mont Clair Capital
Have you ever found your dream home but haven't sold your current one? A bridging loan is a short-term financial solution designed to "bridge the gap" between the purchase of a new property and the sale of your existing one. It provides you with the funds you need to buy your next home without the stress of a rushed sale.
How Bridging Loans Work : The 'Capitalised' Process
A bridging loan is a temporary loan that consolidates the debt from both your old and new properties into a single facility for a short period.
Consolidated Debt: The loan amount is a total of your new property's purchase price plus any remaining mortgage on your old home.
Capitalised Interest: The interest on the bridging loan is not paid on a regular basis. Instead, it is "capitalised," meaning it is added to the total loan balance. This is why borrowers often make no repayments during the bridging period.
Final Repayment: The loan is paid off in full from the proceeds of the sale of your original property. The goal is to sell your old home quickly to end the bridging loan period.
Why It Works This Way : Flexibility and Opportunity
The core purpose of a bridging loan is to give you time, flexibility, and certainty.
Secure Your New Home: It allows you to buy the new property when you find it, rather than waiting for your old home to sell and risking missing out.
Avoid a Fire Sale: Without a bridging loan, you might be forced to sell your current property quickly at a lower price. This loan gives you the freedom to hold out for the best possible price.
Key Things to Know :
Loan Term: Bridging loans are short-term, typically lasting from 6 to 12 months.
Higher Interest Rates: Due to their short-term and high-risk nature, bridging loans often have a higher interest rate than a standard home loan.
Lender Requirements: Lenders will carefully assess your exit strategy and financial position. They need to be confident that you can sell your existing property within the agreed-upon timeframe.
Types of Bridging Loans:
Open Bridging Loan: This is when you have not yet found a buyer for your existing property. This loan is considered higher risk and has a shorter term.
Closed Bridging Loan: This is when you have a signed contract of sale for your existing property. It's considered much lower risk and often comes with better terms.