Bridging finance is moving your loan with your home.
These types of mortgages basically increase your current home loan to buy your new home. You may be able to borrow the fees too, like the transfer stamp duty on your new home. You may also have the option to borrowing some extra money to help with the repayments, during the ‘bridging’ finance period. Once your current home is sold, the funds from the sale will pay down your home loan, and you will end up with your new loan. The ‘bridging’ part of the home loan, is the period when you have a mortgage on both homes.
Once you ‘old’ home is sold, the funds from the sale will be used to pay down the ‘bridging’ home loan, thus ending the ‘bridging’ part of the home loan. At this stage, you will have your new home loan.
A Bridging loan offers you an easy way to purchase or build a new home before you sell your existing one. Rather than needing to make two sets of loan repayments while you are selling your existing home, no repayments are required on the new home loan for the Bridging period. The length of your Bridging Loan period depends on whether you are buying or building your new home.
It is important to note, that there are different rules when it comes to bridging finance, so it is advisable to speak to our AMO Mortgage Specialist first, and learn all the options that apply to your situation. It may benefit you to consider having your 'bridging' finance pre-approved, as this will give you some comfort as you begin to look for your new home