Monthly Archives: August 2021

How Bridging Finance Works

Bridging Finance is what you need when you want to buy a new home, without first selling your existing property.

Bridging Finance may be exactly what you need to:

  • Purchase the home of your dreams
  • Increase the size of your property portfolio
  • Upside or downsize your existing property
  • Aquire a new property before selling your existing property

What is Bridging Finance?

Bridging finance, or a bridging loan, is a short-term home loan. It aims to provide homeowners with a loan to purchase a new property before you sell your existing one.

Closed and open bridging finance are the two main types of bridging finance accessible.

Closed bridging finance typically involves a bank. This is when the sales on both your new home and current home are unconditional, and all you need is to bridge the gap between the two settlement dates.

Closed bridging finance usually has a maximum term of 12 months.

Open bridging finance usually involves second-tier or non-bank lenders. You may consider using this home loan option, when you are wanting to purchase another property without first having sold your current home.

The Pros and Cons

Bridging finance can be a complicated affair. Therefore, if you are considering taking out a bridging loan, we strongly advise that you consider both the benefits and disadvantages of this method of financing.

The Pros

Knowing that you have financial support to tide you over, will help you search for a new home with confidence, even if you haven’t sold your existing property. It would also allow you to purchase your new dream home without selling your existing one first.

You may have the option to pay only interest on your bridging loan, or even to capitalise the interest completely. This can make it much easier to manage your repayments. Again, we can advise you of the advantages and disadvantages of both.

You could use any money left over from the sale of your current property to pay off your bridging loan. This allows you to pay off your bridging loan faster and with less interest.

The Cons

Your current home may not sell right away, leaving you paying interest for longer.

Your existing property may also sell for less than expected, leaving you with more debt than you may have initially planned for.

Need Bridging Loan Solutions? Platinum Mortgages Can Help

Here at Platinum Mortgages, we offer an extensive range of bridging loan options for borrowers New Zealand-wide.

We can provide you with the solutions for both open and closed bridging loans. This will give you the confidence to purchase your next property, while waiting to release profits from a previous venture.

Because no two people are in the same financial situation, we ensure that our lenders’ bridging loans are tailored to your specific needs. They’ll offer you quick, hassle-free finance at competitive interest rates, perfect for the loan term required.

Our Bridging Loan Options

Option 1: Main Bank Bridging Loans

Through major banks, we arrange closed-ended bridging finance. We propose this as a first port of call because interest rates are typically lower and there is less risk.

Under this option, we can help you approach a main bank once your property has sold and you have a settlement date locked in on your existing home.

Both homes will be secured, and you will have to service both mortgages at the same time.

Our main bank bridging loans are subject to servicing and affordability.

How Bridging Finance Works

Option 2: Second Tier or Non-Bank Lender Bridging Loans

We also offer open-ended bridging finance options.

You would choose this option if you have no settlement date yet on your existing home and intend to sell it in the next 6-12 months.

We assist you by approaching non-bank or second-tier lenders. They will enable you to purchase a new property, while your old mortgage is transferred from your current lender.

Security will be taken over both properties. Unlike Option 1, a lender fee as well as a broker fee will be added to your loan, though this can be negotiated. You’ll be charged with higher interest rates, because the lender is taking on greater risk.

There are options to service both mortgages at the same time, make interest-only repayments, or capitalise the interest entirely with a big balloon payment once your existing property sells.

However, keep in mind that if you opt to capitalise the interest, it will continue to be compounded weekly or monthly, potentially resulting in you paying more interest in the long run.

Gaps in cash flow are a natural part of life. If you are on the hunt for a bridging loan to help you settle on that dream property before you’re ready to sell your existing one, Platinum Mortgages can help.

To learn more about our bridging loan options or schedule a consultation with us, please get in touch with our team of professional, qualified Mortgage Brokers / Financial Advisers at [email protected] or 0800 LENDING (0800 536 346).

Why Should You Get Expert Advice From A Mortgage Broker?

A Mortgage Adviser / Mortgage Broker simplifies the home loan application process and facilitates easier decision making. Taking on a mortgage is one of the most significant decisions you’ll ever make. Because of the importance of this decision, it’s crucial that you do it correctly. Making the right choices on your own can be difficult.

Working with a Mortgage Adviser / Mortgage Broker can save you money, time and help you avoid unnecessary stress.

What Do Mortgage Advisers / Mortgage Brokers Do?

A Mortgage Adviser / Mortgage Broker is a person who assists you with the process of obtaining a mortgage. They will find you a good deal, save you time and advice you on everything you need to know. When you work with them, you are working with someone you can trust who knows precisely what they’re doing.

Why Should You Use A Mortgage Adviser – Mortgage Broker?

Why Should You Use A Mortgage Adviser / Mortgage Broker?

There are many advantages to using a Mortgage Adviser / Mortgage Broker to help you get a great deal. If you have any questions, you will be able to rely on them for thorough explanations and answers.

Our Mortgage Advisers / Mortgage Brokers find you the most suitable lender and mortgage solutions, which are tailored to your needs.

Mortgage Advisers / Mortgage Brokers will shortlist your mortgage options based on the rates, deposits, upfront fees and the mortgage’s term.

You could spend too much time, doing unnecessary things and end up with a mortgage that doesn’t work for you. With help, you will find the best options available and strike a fantastic deal to save you time and money.

Regardless of your personal financial position, a Mortgage Adviser / Mortgage Broker will work  to find you the best deal possible.

What Are The Advantages Of Using A Mortgage Adviser / Mortgage Broker?

Some of the specific advantages of using a Mortgage Adviser / Mortgage Broker are:

  • Convenience: They will help you with every step of the way, so you will know you are finding the best deals.
  • Cost-Effective: Using their industry knowledge, they often strike a better deal with lenders than a client would have themselves.
  • Access: Due to their experiences and professional relationships, they will often be in contact with a wide range of lenders. This means that they will be able to find you a deal that fits your situation perfectly.
  • Pre-Approval: They arrange a pre-approval of your mortgage so you will be able to know exactly how much you can borrow. This way, you can search for new houses with confidence.
  • Expertise: They are experts in a complicated field, so they will be able to explain to you complex processes in words you will be able to understand. 
  • High-Quality Service: If you are working with a good Mortgage Adviser / Mortgage Broker, you will receive high-quality service that will be incredibly helpful to your situation.

 

 

 

Want To Work With A Mortgage Adviser / Mortgage Broker?

Working with a Mortgage Adviser / Mortgage Broker can save you money, time and lessen your stress. If you are taking on a mortgage, why not get some help from an expert?

Here at Platinum Mortgages, we are prepared and ready to assist you with all your mortgage needs. Get started today or contact us on 0800 536 346 to start your journey towards an easier, more stress-free mortgage today!