Costs of buying a house in NSW
Buying property in NSW and want to learn more about what costs to expect in the process?If you’re a first-time buyer, you may not know that there is a lot more to budget for than just the purchase...
Bridging finance, also known as a bridging loan, is a short-term financial solution designed to bridge a gap between the purchase of a new property and the sale of an existing one.
Bridging finance, also known as a bridging loan, is a short-term financial solution designed to bridge a gap between the purchase of a new property and the sale of an existing one. It provides temporary funding to cover the period when you are in the process of selling your current property but need funds to acquire a new one.
Considering that bridging loans are a far more short-term financial solution unlike a mortgage, the interest rates tend to be higher. The interest rate on a standard bridging loan can start anywhere from as low as 8% per annum. Most bridging loans have a span of 12 months with most lenders offering some level of flexibility to cater your specific needs.
During the period from when your bridging loan is initiated until the sale of your current home, many lenders incorporate interest-only payments on the higher debt amount. This simplifies the repayment process, allowing you to focus on making principal and interest payments solely on your existing mortgage, rather than juggling repayments for two home loans.
If you’re applying for a new mortgage while under an existing bridging loan, your application may be affected. Outstanding debt on the loan can affect your borrowing potential as the task of juggling two loans could prove difficult.
Compare your property to recent sales in the area to get a current market estimate.
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