A bridging finance loan allows you to buy a new property while waiting for the sale of your existing property. Basically, this type of loan is a temporary mortgage that spans over 12 months. However, in some cases, you may be able to take out bridging finance for longer. Of course, this depends entirely on your lender and their lending terms.
So, instead of taking a mortgage, you take out a bridging loan which is a temporary loan. You can buy the new property right away and move there while you wait for your existing home to be sold.
Is bridging loan a short-term loan I can use for any purpose or for buying a new property while I am still in the process of selling my existing property?
The answer depends on the type of bridging loan you took.
- Peak debt: If the lender takes your existing property and the new property you bought with the proceeds of bridging loan, then you took out a “peak debt bridging finance”. It is a type of financing that covers both properties during the bridging period- which usually lasts from six to twelve months until your property is sold. The amount of loan covers the debt of your “property for sale” and the newly-acquired property. Depending on the loan terms, the lender may require you to repay the interest of the loan during the bridging period or right after the sale was finalized. In most cases, borrowers pay off the peak debt with proceeds of the sale.
- Bridging Loan on New Property: Did you take out a bridging loan on your new property and retains your current property? If so, you may have to repay the interest of both loans throughout the bridging period and pay off the principal of the mortgage of your existing home with the proceeds of the sale. If the selling price is higher than the cost of mortgage, the leftover shall be used to repay a portion of the principal of the new mortgage.
Can I take out a bridging loan for my business needs?
While building your new business, you can use the bridging loan alternative– NSW Mortgage Corp’s short-term loans to meet your business needs until it is stable enough to make money. But, make sure that you adhere to the law of business profitably – the existence of market demand. Learn how you can make money from it and how much it will make before taking out a short-term loan.
Can I use short-term loans for my retirement?
Whether you want to return to the workforce or not, getting the right short-term loans help you maintain your financial well-being throughout the retirement period, or even the bridging period-while waiting for your retirement pension.
Bridging loan for Australians
Do you need a short term loan quickly? NSW Mortgage Corp’ can provide you with fast-approval short-term loan or cash advance, which have better terms than bridging loan. Enjoy the easy-qualification, low doc terms with competitive rates and get your cash within 24 hours!
Contact NSW Mortgage Corp to see which of its loan products is suitable for you. Enquire Now.