Bridging finance is a handy way of raising money when you’re looking to buy a property within a tight deadline. It’s taken off in Australia as a way of providing more flexibility in the timing of house sales and purchases. You might be wondering when you should use bridging finance.
There are a few different situations where it comes in handy, but first, let’s explore what bridging finance actually is.
What is Bridging Finance?
Bridging finance is the term used for a short-term loan that can be accessed quickly. It’s usually used by property developers, or homeowners and investors who want to renovate a property or move into a new house before their current one has sold. The bridging finance creates a bridge of money between their current financial circumstances and their real estate ambitions. Bridging finance can also be attractive for people with a bad credit score, as the house is the collateral used in the loan, so you could still be approved for a bridging loan even if your credit score is not so good.
Who Uses Bridging Finance?
If you’re a small or large property developer and you need to borrow money quickly, bridging finance could be for you. It’s especially useful when you need to refurbish a property or block of flats to then flip for a higher price. The money from a bridging loan can be obtained much faster than a mortgage, which can take months. By being able to pick up that loan money more quickly, you can get on with the renovations, sell the property and then have the money back in your pocket sooner rather than later.
People Moving House
If you’re in the situation where you haven’t sold your current property but you’ve got your eye on a new one, then bridging finance could help you. It can be hard to find a new property within the right timeline of selling your old one. Sometimes it simply isn’t possible and you need some money to close the deal on the new house. That’s where bridging finance comes in. With the help of a bridging loan, you can complete settlement of your new dream home. You can then pay off the loan later when you sell your old house.
Investors may use bridging finance when usingthe equity in their home loan to obtain another loan. People often do this in order to raise money for an investment – perhaps a business or other investment. Bridging finance is more expensive to pay back than a traditional mortgage, so it’s important to take this into account when considering applying for bridging finance.
Get Your Bridging Finance Sorted with Capital Bridging Finance
If you’ve got questions about bridging finance, we’ve got answers. Our experienced team of financial specialists can advise you on the right kind of loan for you. You can trust us to give you the right advice for your situation − just give us a call on 1300 019 669.