Found your dream home? How to purchase by bridging the gap.

Sometimes the perfect property comes your way by surprise, but perhaps you’re not quite ready in the relocation stakes.  Bridging finance could be an option for you to consider between buying and selling.


Often considered a bit risky or expensive, some bridging finance can mean that you are essentially carrying two loans at once and other types of bridging finance will allow you to only pay the end loan amount, while selling your original property, usually over a 6-12 month period.


One of the biggest risks of this loan type is over estimating the eventual sale price of your existing home. If market conditions change during the loan term, you could end up with a short-fall when paying out the bridging loan, and it could cost you more than you bargained for.


An advantage of bridging finance is the ability to save on dead money rental costs between selling and buying and double moving costs, and secure your dream home in the process.


You need to ensure that you really know the true value of your home before committing to a bridging loan and our advice is to be conservative.  If you can make the figures work for you on a conservative estimate, then you will likely be in a position “as safe as houses”.  Three quotes from qualified real estate agents with a long term history of selling in your suburb would be a great place to start, or you could organise a bank valuation.


Mike Davies, of Nectar Mortgages says, “Make sure you have a broker who knows his or her way around the myriad of loan options, and can help you with selecting the best bridging finance solution for you”.


We suggest you speak to a broker, who can guide you through the whole “bridging the gap” process including what amount of equity you will need in your current home, interest rates and associated costs and fees.


Need a broker?  Contact Mike Davies, Nectar Mortgages on 0424 885 878.