Bridging Loan

What is a Bridging Loan

A bridging loan is not much different from traditional loans

Except that they are for short periods and interest only

Lenders will vary on eligibility for bridging finance and not all lenders offer this loan

Basically lenders look at total debt during the bridging period of both loans combined

Customers must be able to demonstrate the ability to make interest only payments on the total debt

A Bridging loan gives you the flexibility to purchase a new property before you have sold your existing property.
It can take the stress out of having to align your property settlement dates.
It allows you to borrow more money than you otherwise could under normal circumstances.

Interest is calculated daily and charged monthly
You may end up selling your existing home for less than you expected
The lender may step in to assist in the selling of the existing home if it does not sell within the 12 month period (contract will be breached and consider this a default)

Bridging loans generally have a 12 months term, you need to sell and settle your current property within this timeframe.

A bridging loan is not always suitable or available to all customers, good serviceability and equity is required.

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