In today’s competitive Australian property landscape, timing can make all the difference between securing your dream home and missing out. With housing markets across the Gold Coast and beyond experiencing strong demand despite economic uncertainties, many homebuyers face a common dilemma: how to purchase a new property before selling their existing home.
What is a Bridging Loan?
A bridging loan is a short-term financing solution designed to “bridge” the gap between purchasing a new property and selling your existing one. This specialised mortgage solution provides the liquidity needed to act decisively in a hot market, allowing you to make unconditional offers that stand out to sellers. This also allows you to put forward an offer on a property without having to include the subject to sale clause which may put your offer to the bottom of the pile. Having your finance setup as a straight purchase can get you back in the drivers seat to secure the property you desire.
Why Consider a Bridging Loan in Today’s Market?
The current property landscape presents unique challenges… With interest rates stabilising after recent fluctuations and housing stock still tight in desirable areas, competition remains fierce. On the Gold Coast specifically, limited inventory continues to drive quick sales and multiple offers on quality properties.
Practical Tips for Using Bridging Finance
- Assess your borrowing capacity realistically – Ensure you can comfortably manage potential repayments on both properties if your existing home takes longer to sell. We also have bridging finance options where you only need to make payments on your home loan on the new property and the bridging portion interest can capitalise up to 12 months.
- Understand the exit strategy – Most bridging loans are designed to be repaid within 6-12 months. Have a clear timeline and pricing strategy for selling your current property.
- Budget for higher interest rates – Bridging finance typically carries higher rates than standard mortgages. Factor these additional costs into your calculations.
- Prepare for peak debt exposure – Your “peak debt” is the combined value of both loans. Lenders typically cap this at 80% of the combined property values to minimise risk.
- Get professional valuation advice – Realistic property valuations are crucial for bridging loan approval.
At Mortgage Innovations, we specialise in tailoring bridging loan solutions to meet your specific needs. Our Gold Coast team understands the local market dynamics and can help you navigate the complexities of bridging finance to secure your next property with confidence.
Don’t let timing constraints prevent you from making your next move in this competitive market. Contact our team at Mortgage Innovations today to explore how bridging finance could be your strategic advantage.
Arranging finance can be stressful, especially with some lenders now taking extra steps including going through your living expenses and credit scoring (ouch!). And sometimes banks can make you feel like ‘just a number’. That’s why we want to do things differently: because you deserve better.
As a local family-owned business, our team takes the time to listen, answer your questions and make getting your home, car or equipment loan as easy as possible.
