Bridging Loans Home Loans

Related Categories: Home Loans, Introductory Rate Home Loans, Construction Home Loans, Fixed Rate Home Loans, Low Doc Home Loans, Line of Credit, Variable Rate Home Loans

Bridging Home Loans

Although bridging home loans are a relatively recent phenomenon in terms of their use, they have actually been helping Australian home buyers for decades. This type of loan is designed to address the various causes that create the rather common problem of finding the right new home for your needs while not yet having sold the old one.

The ability to bridge that financial gap through the use of this particular loan has increased in popularity since banks began loosening their lending rules. With this type of loan, you can purchase a new property before you old one has sold.

It was not long ago that this type of loan was perceived as a big risk with interest rates that were accordingly high. In addition, they are best designed for those who already have at least half of their previous mortgage already paid. This way, the combined interest rates of both loans will be more manageable. There are different models used to structure the bridging home loan and they also contain the familiar fees and charges as found with many other types of loans. A bridging loan will only require repayments on the interest until the property itself is sold and the principle of the loan can be fully repaid.

How Bridging Home Loans Work

This type of loan will allow you to purchase a new home before you old home is sold. The size of the loan can be calculated by adding the value of the new property to the mortgage you are currently carrying on your old home. By subtracting the estimated sale price, you can arrive at a figure that will be the size of the bridging loan.

A bridging loan is an interest-only loan during the time in which your old home is still up for sale. During this time, the interest will start to compound each month until your home is finally sold. The longer it takes for your old home to sell, the more interest you will pay on a bridging loan.

The Risks Associated with Bridging Loans

You will need to work with your lender to see if bridging home loans are right for your needs. The biggest question will be how long you can pay the interest on two separate loans. This can become quite burdensome the longer your home goes unsold.

However, the biggest risk that you run may very well be overestimating how much your old home will sell, leaving you short of paying off the loan. The more the loan falls short, the more that you will have to pay out of pocket. This is why many lenders suggest caution before deciding on taking on the burden of a bridging loan. Even the best laid plans may fall apart, so you will need to be careful before deciding if a bridging loan is right for you.

In addition to the loan itself, there are numerous fees and charges that are associated with this loan as well. So, anyone who is looking at getting bridging home loans will need to take in the totality of the amount, including the charges and fees so that it is all covered. 

Search within these results:

Results

Aussie Sunshine

Shop 44 Sunshine Plaza
324-328 Hampshire Road
Sunshine, Victoria 3020
Australia

Let us take the hassle out of your new home purchase, Investment purchase, refinance or let us do a health check on your existing mortgage. We cover

Auswide Bank Ltd

16–20 Barolin St
Bundaberg, Queensland 4670
Australia

Auswide Bank Ltd, formerly known as Wide Bay Australia has been in the banking and finance sector for over 50 years and primarily deals in home loans

Bank of Queensland Limited

259 Queen St
Brisbane, Queensland 4000
Australia

Bank of Queensland Limited is one of the oldest financial institutions of Australia and has its headquarters in Brisbane, Queensland.

Bendigo and Adelaide Bank Limited

The Bendigo Centre
Bendigo, Victoria 3550
Australia

Bendigo and Adelaide Bank Limited came into existence in 2007, when the merger between the Bendigo Bank and Adelaide Bank took place.

Heritage Bank

400 Ruthven St
TOOWOOMBA, Queensland 4350
Australia

Heritage Bank is the biggest customer owned or mutual bank in Australia, and has over $8.5 Billion in assets.

BankMecu

222 High Street
Kew, Victoria 3101
Australia

BankMecu banking products include home loans, car loans, personal loans, business loans, mortgage loans, credit cards, insurance products,

Victoria Teachers Mutual Bank

117 Camberwell Road
Hawthorn East, Victoria 3123
Australia

Victoria Teachers Mutual Bank offer wide range of banking products, including transaction and saving accounts, term deposits, credit cards, personal

Arab Bank Australia Limited

Level 7, 20 Bridge Street
Exchange Centre
Sydney, New South Wales 2000
Australia

Arab Bank Australia offer transaction accounts, investment accounts, cash management accounts, online savings accounts, personal loans, home loans,

Barry Lynam Home Loans and Financial Services

22 Old Shoal Point Rd
Bucasia, Queensland 4750
Australia

Barry Lynam Home Loans and Financial Services offers a wide range of residential home loans and personal loans.

Australian Mortgage Options

5 Lime Street
King Street Wharf Level 3, Suite 323
Sydney, New South Wales 2000
Australia

AMO is one of the leading loans and mortgage brokers in Australia. The company is primarily based in Sydney, NSW. Since its inception in 1998, the

Featured Listings

  • Easy Plan Financial Services

    39 Montague Street
    North Wollongong, New South Wales 2500
    Australia

    Easy Plan Financial Services is a Wollongong based financial

  • Provincial Home Loans

    42 Barracks Flat Drive
    Queanbeyan, New South Wales 2620
    Australia

    Provincial Home Loans is a Canberra – Queanbeyan based

  • ABR Finance

    24-26 Halifax Street
    Adelaide, South Australia 5000
    Australia

    The experts at ABR Finance specialize in finding the best

  • SJ Financial Services

    94 Belford Street
    BROADMEADOW, New South Wales 2292
    Australia

    SJ Financial Services aims at providing loans for almost

  • Coastline Credit Union Limited

    64 Elbow Street
    West Kempsey, New South Wales 2440
    Australia

    Coastline Credit Union Limited is a state credit union in