Just wondering if any finance guru’s out there can provide advice or help secure a bridging loan to help my wife and I jump from our existing PPR to a new build without renting in between?
The big banks won’t entertain the idea, but aside from the inconvenience of moving house twice, my wife and I aren’t keen on paying more in rent than we do on our current mortgage, and forego the likely equity growth if we stay in our current place and continue to pay down the loan for the 12+ months we anticipate it will take to plan and build our new place.
Happy to provide more details outside the public forum if anyone is experienced in this type of thing. Many thanks in advance!
Good Morning,
My name is Chris and I look after a lot of the finance queries for Property Investing.
There are one or two lenders, who are also major lenders that will offer bridging finance for up to 12 months and allow you to complete the servicing based on the end debt only for the new purchase/build, rather than the peak debt of the two properties throughout the bridging period.
These lenders allow you to only make repayment based on the end debt of your new purchase also, while the bridged amount will capitalise interest for up to 12 months, with no repayments required, and the debt is cleared once your existing property has sold and settled.
The bridge loan will have a higher interest rate attached to it, so obviously the sooner you get the existing property sold and settled the better, but if you are looking at building, you will more than likely be looking at almost 12 months.
There are a couple of strict prerequisites for this type of lending which are not often discussed beforehand, particularly that the bridging period is a strict 365 day period, which then can have some consequences, so you need to make sure this is the type of lending that will fit your situation.
If you would like to discuss in more depth, or have any further questions I can assist with, please feel free to give me a call on 0477 212 840 or my email address is [email protected].
Christopher Berry | Find A Better Rate Home Loans
https://findabetterrate.com.au
Email Me | Phone MeTaking the Hard Work of your home loan
Many thanks Chris,
Apologies I haven’t been in touch this week, but I will try and give you a call to discuss early next!
Really appreciate you getting back to me.
Because some smaller lenders offer bridging loans even when large banks won’t, a broker might be your best option.
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