Counting down the days before the house you want is taken off the market while you’re still waiting for yours to sell? Bridging loans are short-term loans, with terms of up to 6-12 months, so you can purchase your new home without needing to wait. Intended to be short-term loans they can carry a high cost but when you need to have the money quickly for the property of your dreams. The sale of your previous house will even be used to pay off, or down the bridging loan, so it’s possible to end up with a smaller loan than what you started with.
A bridging loan is a niche type of loan as it focuses on one particular part of life. The requirements are that you currently own a home, maybe with a mortgage, and wish to buy another with the intent of selling the original home. Considering those circumstances this loan will not be for everyone. However, if you do fall into that niche then this is the good news that you are hoping to hear. The housing market is constantly fluctuating and if things do not line up properly then your dream home could be sold before you have a chance to sell your current home.
Those previously mentioned requirements to meet for a bridging loan might put you into this category but do not necessarily mean that you will want a bridging loan. Until the previous house sells you will effectively be paying the interest on a higher loan. The interest accumulating can typically be capitalised to the bridging loan meaning that you are not required to make a payment until your home sells. The longer your home is on the market, the more interest you will pay when your home sells. Despite these negatives, the freedom of a bridging loan can allow you to buy your future home before it disappears forever.
If this sounds like the loan for you, we can analyse your current mortgage, your financial situation, and your new potential house and come up with a plan to make it happen. From there we negotiate with lenders to find a plan that can work within your means and meet your needs. Let us help bridge the gap between you and your new home. Call us here at Carwardines and set up an appointment to start the ball rolling on your new home.
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