Bridging Loans

Break Down

• A Bridging Loan Facility, does allow you to purchase a new dream home NOW!!! and sell your current existing home later on!!, that means you can buy or build your new home before you sell your existing home
• This bridging loan facility allows you to move directly into your new home, and usually avoid moving into a rental property
• They are usually used to 'bridge' the gap between the sale of the property and the purchase of another
• The interest t=rate is usually calculated at the same rate as that of the Standard Variable Rate Loan
• Repayments on a bridging loan facility are optional during the bridging period (generally 6 months). Should you opt and choose not to make repayments, the interest is capitalised on your home loan, thus increasing the final amount you have to borrow following the sale of your current home

Drawbacks

• If you don't sell your existing home quickly, the interest bill can quick and really add up
• You must have sufficient equity in your existing property to support the purchase of both
• The interest is charged on the Full amount of the New Loan
• You may be forced to sell your existing home at a much lower price that you want to