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Bridging Finance in Australia

Are you financially trapped between the purchase of a new home and the sale of your existing one?

This is a common predicament that many homebuyers find themselves in, especially in competitive real estate markets like Melbourne. Fortunately, bridging finance can provide a solution to this challenge. At ARG Finance, we specialize in bridging finance Melbourne and can assist you in navigating this complex financial situation, keeping you well-informed every step of the way.

What is Bridging Finance?

Bridging finance, also known as a bridging loan, is a short-term loan that helps homebuyers “bridge” the gap between the purchase of a new property and the sale of their existing one. It allows you to access the equity in your current home to fund the purchase of a new property before your current home is sold. Bridging loans are typically more expensive than traditional home loans due to their short-term nature and higher risk for lenders. However, they can be a valuable tool for homebuyers who need to move quickly or who have found their dream home before selling their current one.

TYPES OF BRIDGING LOANS

There are two main types of bridging loans available:

  • Closed Bridging Loans
  • Open Bridging Loans

Closed bridging loans are designed for homebuyers who have already exchanged contracts on the sale of their existing property. The repayment date for the bridging finance is pre-agreed upon before finalizing the loan, providing a clear timeline for exiting the loan. This type of loan is less risky for lenders as there is a definite date for repayment.

Open bridging loans, on the other hand, are suitable for homebuyers who have found their dream property but have not yet sold their existing home or set a definite date for the sale. The standard limit for an open bridging loan is twelve months, but banks may negotiate an extension if needed, provided the borrower continues to pay interest during the repayment period and the property market remains stable. Open bridging loans are riskier for lenders as there is no set date for repayment, which can result in higher interest rates for the borrower.

When & Why Consult a Mortgage Broker for Bridging Finance Melbourne?

Selling a property can be a lengthy process, and delays in receiving funds from the sale are not uncommon. This is where a bridging loan for house purchase can help bridge the financial gap. However, bridging loans are different from traditional home loans or construction loans and come with their own set of complexities. Before embarking on a bridging loan, it’s essential to consult with experienced bridging finance brokers who can guide you through the process and help you make informed decisions.

At ARG Finance, our knowledgeable bridging finance Melbourne brokers provide invaluable advice on various factors, such as bridging loan rates, while also clearing any doubts you may have about bridging loans and their benefits during the home buying process. As a well-established bridging finance company, we have the expertise to help you navigate this complex financial landscape.

Benefits of Bridging Loans for House Purchase

Despite the higher costs and shorter timeframes associated with bridging finance, there are several benefits to consider:

  • You can confidently search for a new home without having to wait for the settlement of your existing property.
  • You have the flexibility to choose between principal and interest or interest-only repayments, depending on your financial situation.
  • The proceeds from the sale of your existing home can be used to reduce the balance on your bridging loan following settlement.
  • Many bridging loans allow for unlimited lump sum payments, giving you the opportunity to pay off your loan faster and save on interest.

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Frequently Asked Questions

Get in Touch with ARG Finance Today

If you’re looking for a trusted bridging loans consultant, get in touch with ARG Finance. Call us on 1300 511 655 or send an email to info@argfinance.com.au for expert advice.