A bridging loan can be useful if you need to borrow money for a short period. It can help to ‘bridge the gap’ if you want to buy a new home before selling your old one. Bridging loans can also be used if you buy a property at auction, where you’ll need the money immediately but may not have sold your current property yet.
What are some of the benefits of a bridging loan?
Whether you’re upgrading or downsizing, a bridging loan can provide a solution that allows you to avoid the stress of having to sell your home first and find temporary accommodation while you search for your next home.
- Being able to proceed with confidence when you’ve found a new homebut haven’t started the process of getting your current home ready for sale.
- Avoiding the hassle of having to rent, so you can skip the stress of having to sell your current home, move into a rental property and then move again once you’ve found a new home.
- Having the option of making payments only on your current loan (you’ll need to pay interest on your bridging loan when you sell your existing home and the bridging loan is closed).
- Having the option of reducing your interest costs by making payments on the bridging loan during the bridging period.
- Adding upfront costs such as stamp duty and legal fees to your bridging loan if the property value and equity is sufficient.