How Do Bridging Loans Work
How Do Bridging Loans Work? A Bridgit Exclusive Guide
If you’ve been shopping around for a new home or holding off while trying to sell your current home, you’ve likely asked yourself this question at least once: How do bridging loans work?
Bridging loans, also known as bridge loans or bridge financing, are a short-term financing type that’s designed to bridge the financial gap between selling your current property and buying a new one.
Open bridging loans have no pre-agreed loan settlement date (meaning your property is still on the market), while closed bridging loans have one (meaning you’re in the process of finalising the sale of your property).
Specifically, a bridge loan typically pays off your current mortgage plus facilitates the purchase of a new home, before you sell. Your bridge loan is then settled by the proceeds of your property sale, with any remaining balance and accrued or unpaid interest paid by you over a period of time. In Australia, the bridging period of an open bridging loan ranges from six to twelve months.
In the dynamic property market, bridging loans offer opportunities to individuals looking to purchase property or manage expenses while waiting on the sale of their current home.
It’s also exactly where Bridgit can help, as a bridge financing specialist dedicated to helping Australian homeowners not just save on various property transitioning costs but also capture opportunities as they come.
Disclaimer: The opinions expressed in this article are strictly for informational purposes and should not be taken as financial advice or recommendations. Views are subject to change without notice at any time.
If you’ve been shopping around for a new home or holding off while trying to sell your current home, you’ve likely asked yourself this question at least once: How do bridging loans work?
Bridging loans, also known as bridge loans or bridge financing, are a short-term financing type that’s designed to bridge the financial gap between selling your current property and buying a new one.
Open bridging loans have no pre-agreed loan settlement date (meaning your property is still on the market), while closed bridging loans have one (meaning you’re in the process of finalising the sale of your property).
Specifically, a bridge loan typically pays off your current mortgage plus facilitates the purchase of a new home, before you sell. Your bridge loan is then settled by the proceeds of your property sale, with any remaining balance and accrued or unpaid interest paid by you over a period of time. In Australia, the bridging period of an open bridging loan ranges from six to twelve months.
In the dynamic property market, bridging loans offer opportunities to individuals looking to purchase property or manage expenses while waiting on the sale of their current home.
It’s also exactly where Bridgit can help, as a bridge financing specialist dedicated to helping Australian homeowners not just save on various property transitioning costs but also capture opportunities as they come.
Disclaimer: The opinions expressed in this article are strictly for informational purposes and should not be taken as financial advice or recommendations. Views are subject to change without notice at any time.
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