In a competitive property market, many homeowners face a common challenge. You find your next dream home before selling your current one. Abridging loancan help you make the move smoothly without feeling rushed or pressured to sell below value.

What Is a Bridging Loan

A bridging loan is a short-term loan that covers the gap betweenpurchasinga new property and selling your existing one. It allows you to buy your new home first, then repay the loan once the sale of your old property settles.

Most bridging loans are available for periods between six and twelve months, depending on your lender and situation.

How It Works

When you take out a bridging loan, the lender combines the value of both properties todetermineyour total loan amount. Interest is usually charged only on the bridgingportion, which you pay off once your current property sells.

For example, if your current mortgage is 400,000 and your new property costs 700,000, your total loan becomes 1.1 million until you sell your old home.

Benefits of a Bridging Loan

• Avoid renting or moving twice while waiting to sell
  

• Secure a new home before prices increase
  

• Have more time to market your existing property properly
  

• Reduce pressure during the sale process
  

This flexibility can be especially helpful when property supply islowand opportunities move quickly.


Things to Consider

Bridging loans often come with higher interest rates compared to standard home loans. The cost depends on how long your existing property takes to sell. You also need a solid exit plan because lenders want to see evidence that your current property will sell within the loan term.

Interest is typicallycapitalised, meaning it is added to the loan balance instead of being paid monthly during the bridging period.

Managing the Transition

A clear timeline and realistic property valuation are key. Start by getting a professional appraisal of your currentpropertyso you know what to expect. Keep communication open with your lender and be conservative with your estimates to avoid shortfalls.

Lead Magnet Integration

Brokify’sBridging Finance Guideexplains how bridging loans work in simple terms, including examples and repayment scenarios. It can help you understand whether thisoptionsuits your timeline and budget.

Final Thoughts

A bridging loan can make upgrading orrelocatingeasier, but it requires planning. Take time to understand the costs, risks, and timing before committing. With careful management, it can provide flexibility and peace of mind while transitioning between homes.

Visit www.brokify.com.au to book a consultation with our expert team today!