Concurrent home purchases and sales can cause some financial difficulties. The money from the sale of your present house is frequently required to finance the down payment on your new house. What happens if you don’t sell your current home before you find the ideal house?
A bridge loan operates as follows:
- With short-term loans, equity can be used as a down payment for a new house. This is possible without selling your old house.
- Following the sale of your home, you can use the equity as the down payment when it comes to refinancing transactions i.e., conversion of the short-term bridge loan into a regular mortgage loan (fixed).
There are so many lenders who offer bridge loans nowadays. But if you are looking for a trustworthy lender, contact the team of Mango Credit. This commercial lender is well known in Australia for short-term lending solutions. Visit their website to know in detail about their Bridging Loan.
If you anticipate selling your current house and purchasing your next one fast, bridge loans with 6 to 12months terms are the ideal option. Below are some ways in which they will be helpful.
- Even with money invested in the old house, they permit you to purchase a new one.
- Your monthly spending won’t skyrocket if you have two house payments because the payments related to your new home are deferred for 6 months. You will carry on making your regular mortgage payments on your previous residence. This means you can stay relaxed.
- Prepayment fines are not applicable.
- They lessen the stress associated with moving more than once quickly.
- This loan scheme permits a buyer to submit a non-contingent offer, enhancing your credibility as a serious buyer.
Interest rates might change, and terms can differ depending on the lenders and location. A bridge loan, for instance, might not have payments in the first few months, but interest will accumulate and become payable when the loan is repaid after the sale of the property.
Buy or sell?
You can know when to buy or sell by understanding the current state of the real estate market. Try:
- Keeping track of weekly real estate transactions in your preferred area.
- Keeping track of changes in interest rates and the general economy.
- You must take into account your individual circumstances, your selling goals, seasonal factors, and market condition to decide when is the best time to sell.
What are the benefits of selling before buying?
You’ll be aware of the precise amount you must contribute to your next transaction.
- You need not rush up. In fact, you can wait until get the sale price that looks satisfactory to you.
- You need not apply for a bridge loan for financing both properties.
What are the benefits of buying before selling?
- Not stressing about quickly finding a new home to purchase.
- Generating more money from the sale of your home and taking the advantage of a market that is improving.
Choose a reputed lender in your location today to apply for a bridge loan!