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Property bridging finance Umhlanga

If you’re looking to purchase a new home but your existing Umhlanga home still hasn’t found a buyer, you may need bridging finance. Bridging finance helps you fund the purchase of your new property before your existing home has been sold, which means you don’t miss out on buying the home you have your mind set on just because you have to wait until you’ve sold your existing home.

Bridging finance is becoming a more popular source of finance for those looking to raise money for a property purchase under a tight deadline, we at Bayside Finance Solutions can provide the funding you are looking for.

What is property bridging?

Bridging finance is a type of interim loan that allows property owners, developers and investors to access money quickly to cover both existing property and the new property you’re looking to purchase. Repayments on your bridging loan are usually calculated on an interest only basis during the time it takes to buy your new home and sell your existing home – called the bridging period.

 At Bayside Finance Solutions in Umhlanga we will consider loaning to people even if their credit score is less than perfect, since property is being used as collateral and leveraging its value in order to bridge a short period of time and borrow short term finance.

Accessing bridging finance can be accessible in around 2 to 4 weeks, compared to a mortgage from a bank which could take several months.
In case your existing home takes longer than expected to sell, and to help reduce your total loan amount, it is prudent to continue making repayments so you’re not left with a hefty lump sum to pay back. Bridging finance can be a tricky form of finance, so it’s worth getting advice from a someone who knows their business when it comes to mortgage to ensure you understand all of our loan requirements.

How does property bridging finance work?

Bridging finance is always secured against a property
A bridging loan is calculated by adding any debt owing on your existing Umhlanga home to the value of your new home, and then subtracting the potential sales price of your existing home.
The amount leftover is called the principal and in most cases during the bridging period you’re only required to pay back the interest calculated on the principal. Interest will be compounded monthly though at the standard variable rate and added to your principal or ongoing balance. This amount will become your mortgage on your new property once your existing home has sold.
Before considering a bridging loan, it’s recommended you have at least 50% of your existing home’s value in equity, in order to avoid paying a sizeable amount of interest. And bear in mind that during the bridging period, you’re essentially paying off the interest on two properties, so selling your existing home is a priority


What are the benefits of bridging finance for your Umhlanga home?

Property bridging finance takes away the pressure of having to match up settlement dates, letting you sell your house without worrying about losing it entirely. It is the best way of buying the home you want immediately without having to wait, letting you secure a new property without having to spend days or weeks worrying about selling your existing house first. It is also an ideal option for finance if you’re considering building a new home in Umhlanga while you live in your current home.

A mortgage really isn’t an option, as this can take weeks, and getting a definite buyer for your current property may take time. This is one of the most common reasons why Bayside Finance Solutions has more and more clients wanting advice and a bridging solution, as it helps to ‘bridge’ the gap between selling and completion, enabling you to obtain your dream home. 

What to think about

Get advice about bridging finance before making any decisions. There are quite a few factors to consider when deciding on whether or not bridging finance is the right option for your particular situation:

  • What period of time do you need the funds for?
  • What is the average time properties are taking to sell in your area?
  • How soon can you get your existing home ready for sale?
  • Are you building a new house or buying an existing property?
  • Will you be able to meet the repayments on your current loan and your bridging loan?
In today’s South African property market, it makes sense to move quickly when you find the property you want to buy. Having to wait until you’ve sold means you could potentially miss out. If you think bridging finance could provide a solution while you sell your existing home in Umhlanga and buy your new dream home, talk to us at Bayside Finance Solutions and we will give you options and advice.


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