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Bridging finance on property is a short-term loan used to bridge the gap between the purchase of a new property and the sale of an existing one. It helps homeowners access funds quickly to facilitate a smooth transition between properties, covering costs such as deposits, mortgage payments, and other expenses. Typically, bridging finance carries higher interest rates than traditional mortgages due to its short-term nature and higher risk. <br>For more information visit our website- www.nzmortgages.co.nz or Contact us at 0800 100 300
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What is Bridging Finance on Property? Bridging finance is a short-term loan used to bridge a financial gap, typically when buying a new property before selling an existing one. It's commonly used to secure property purchases quickly.
What is Bridging Finance? 1 2 Short-Term Solution Flexible Terms Bridging finance is a short-term funding option that helps individuals and businesses to secure property transactions without delays. It allows flexible payment options and can be arranged quickly, providing a swift financial solution when buying or renovating a property. 3 High Interest Rates Although convenient, the interest rates for bridging finance are higher than traditional mortgage rates.
How Does Bridging Finance Work? Application Process Dual Repayments Secured Against Property Borrowers can apply for bridging finance through specialist lenders or banks, with a streamlined and efficient approval process. Bridging loans are usually set up to be repaid within 6-12 months or when the existing property is sold, whichever comes first. The loan is secured against the borrower's property or properties, making it less risky for the lender.
Benefits of Using Bridging Finance for Property 1 2 Quick Access to Funds No Waiting Period Enables individuals and businesses to act fast when securing new properties or funding property development projects. Borrowers can receive funds more quickly than traditional mortgage applications, avoiding delays and capitalizing on investment opportunities. 3 Flexible Payments Provides interim financial relief during property transitions or renovations with flexible payment options.
Risks and Considerations of Bridging Finance Interest Costs Property Valuation High-interest rates can significantly increase the overall cost of the finance, affecting the profitability of the project. Dependent on the sale of the existing property, an undervaluation could lead to financial constraints. Market Dependency Market fluctuation and property sale delays can expose borrowers to financial risks and uncertainties.
Application Process for Bridging Finance 1 Consultation Initial consultation with a financial advisor or broker to discuss borrowing options and determine eligibility. 2 Document Preparation Preparation of required documents such as proof of income, property details, and credit history for the loan application. 3 Approval and Disbursement Completion of the loan application process and disbursement of funds, usually within a short time frame.
Conclusion Bridging finance on property serves as a short-term loan option to bridge the gap between the purchase of a new property and the sale of an existing one. At NZMortgages, we offer bridging finance solutions to facilitate smooth transitions for our clients, providing them with the necessary funds to secure their new property while awaiting the sale of their current one. Trust us for seamless property financing solutions tailored to your needs.
