Why Bridging Finance could be the key to unlocking your next property purchase in a tightening market

March 27, 2023

As the property market remains ever changing, it's important to have a solid financing strategy in place. That's where Bridgit comes in - offering a fast and alternate way to access the funds you need via a bridging loan, so you can take advantage of new opportunities and avoid some of the struggles that can come with buying and selling property. 

In this blog post, we'll explore why bridging finance is an option to consider in a tightening property market.

Avoiding the hidden costs of selling first

One of the biggest challenges of selling and buying property is the uncertainty around timing and having to take on hidden costs that you have not planned for. If you sell your home before you've found a new one, you could end up paying for things you have not budgeted for. The current rental market has some of the lowest vacancy rates in years, meaning it is difficult to find a rental and the prices have skyrocketed. Storage and moving costs are another one to make note of, you may end up moving 2 or 3 times in a short period which comes with removalist costs and in some cases even storage costs.

When you take these costs into account the Bridgit solution is a compelling one, as you ultimately remove the need for them.

With bridging finance, you can access the funds you need to purchase your new home before you've sold your current one, moving once, straight into your new home whilst selling your existing one. 

Avoiding uncertainty

Another challenge of buying and selling property is the uncertainty around whether you'll be able to buy again quickly without the market turning on you. We've seen significant drops and increases in the property market over the last few years. The cash rate forecast is constantly changing and the market will react to this. It is difficult to know when the right time to buy or sell is. Bridging can remove some of this uncertainty as you will be buying and selling in the same market, avoiding risk for big fluctuations in property values and your financial position.

Interest-free gives you time to sell and transparency on price

One of the biggest advantages of Bridgit is that it offers an interest-free period, which gives you time to sell your home and plan your finances without having to worry about variable interest rates changing every month. At Bridgit, our set-up fee is fixed, so you can plan your sale within the interest-free period and have a clear understanding of your costs. Our biggest piece of advice is to have your property prepared for sale, so when you buy with Bridgit, you can list and sell your home within the interest free period.

Make the most of your equity

With the cost of living rising and Australians having the majority of their wealth tied up in property, it is even more difficult to secure property finance from a traditional lender. The general assessment process is to look at your income and expense position, to determine how much you can borrow, often not considering your equity position. This can put borrowers who have their wealth tied up in property in an unfavourable position to secure finance. 

At Bridgit, we take into account your equity position and secure your loan against both the incoming and outgoing property. For upsizing when there is a loan amount remaining after the sale and partial repayment will be made, we assess your income and expense based on servicing the end loan amount to ensure that you can refinance confidently into a long term mortgage with a lender of choice. Essentially we take into account your equity, meaning we can help more Aussies.

Access to funding for downsizers is even more challenging, especially with the tightening policies of traditional lenders and the rising interest rates. At Bridgit, we recognize the importance of property as an investment and understand that downsizers face unique challenges in securing finance due to their generally lower income. That's why we predominantly base our assessment on your equity position rather than your income. This way, we can offer flexible financing options that cater to your individual circumstances, providing a pathway to your perfect home that may not have been possible with traditional lenders

Never miss an opportunity

With Bridgit's 24-hour approval time for bridging finance, you can apply and confidently put an offer in at an auction, without having to have sold first. This means you never have to miss an opportunity to secure the home of your dreams.

Not only can you make the most of opportunities, but you can take your time with a bridging solution. Have your home prepared for sale, and spend time searching the market for a property you love. Once you have found that perfect place, put an offer in confidently with Bridgit. When successful, list your ready to go home for sale, and repay your Bridgit loan once you have sold. 

Manoeuvring your way through this market is difficult, the hidden costs of selling before you buy are increasing, there is less stock on the market and traditional lenders are not providing flexible solutions. At Bridgit, we are dedicated to helping you progress and make your next move on your terms. 

If bridging finance sounds like the right option for you, have a chat with our team to see how we can help you.

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