Property Bridging Finance
Don't let your dream home slip away....
Property Bridging Finance may be the answer to purchasing your dream home, raising a further bond on your existing property or come in handy in difficult situations when transferring a bond from one financial institution to another.
Bridging Finance is becoming a more popular source of finance for those looking to raise money for a Property with a deadline. We all know 2020 as a disaster year, but why let Lockdown and COVID19 affect your new dream home purchase. We at Bayside Finance Solutions have just the answer for you through our Property Bridging Finance service.
What is Property Bridging Finance?
Property Bridging Finances is an interim finance advance. It gives property Owners access to money quickly to cover expenses (possible a dream home, school fees, living costs, etc) while waiting for a property transfer at the Deeds office. Repayments on bridging finance are calculated on a fee basis from date of fund transfer to the repayment date. Repayment occurs once the transfer of a property has been finalised and the seller has received their payment (equity) for the property through a transferring attorney.
Accessing Property Bridging Finance can be relatively fast when compared to a mortgage bond or a home loan from the bank which may take months. At Bayside Finance Solutions we work very closely with Brokers to minimise the time it takes to complete a Bridging Agreement as we understand the cash flow pressure people could be in while trying to meet payment deadlines. We pride ourselves on being able to give you expert advice from our experienced team to ensure that you fully understand all Bridging Finance requirements.
What can Property Bridging Finance Advance be used for?
Property Bridging Finance is commonly applied for whilst awaiting finalisation of:
- The sale of a property.
- Raising a further bond on an existing property.
- Transferring a bond form one financial institution to another.
Many sellers apply for these funds to settle transfer duties, transfer fees or to pay rates and taxes. These fees need to be settled before the Deeds office will process the property transfer.
How does Property Bridging Finance Work?
After receiving an application though an attorney, the application will be examined to ensure all the required information has been provided. Property Bridging Finance is always secured against the equity from a property sale. We offer you advances up to 80% of the equity due to you after all disbursements have been made.
During the bridging period, the discounting fee on Bridging Finance is calculated on the advanced fund amount. We pride ourselves on being able to provide you with competitive rates and individual attention.
Repayment on Property Bridging Advances are done as a lump sum payment on an agreed upon date. The discounting fee amount is added to the capital amount advanced to calculate the settlement amount due. Such settlements are made through an attorney, and paid from the released funds of the sold property.
This same process is followed when Property Bridging Finance is secured for raising a further bond on the existing property or transferring a bond from one financial institution to another. In the case of Property Bridging Finances being secured for switching a bond from one financial institution to another, Bayside Finance will offer 70% of the equity due to you.
What will be included in your settlement statement?
Once a transaction is registered in the Deeds office, the registering attorney will request a settlement amount. This will appear on a statement and the following amounts reflected:
- The capital amount advanced ;
- The discounting fee;
- The discounting rate and;
- The period of the bridging finance advance.
What are the benefits of Property Bridging Finance?
Property Bridging Finance takes away the pressure of meeting payment dates and allows you to utilise your funds due to you immediately through a Bridging Agreement. You have peace of mind in that funds are released to you when required and the repayment is secured through your equity.
What are the risks of Property Bridging Finance?
As we operate openly with our Brokers and Clients, we do like to make our clients aware that Discounting fees on Bridging Finance could be slightly more than when compared to a traditional bank mortgages or home loan. Bridging Agreements are usually only executed over months and the funds are paid back within a short period.
Property Bridging Finance repayment is reliant on the process efficiency of South African Deeds office which can affect the repayment date. Property transfers take time and this period needs to be considered before applying.
What are some reasons people apply for Property Bridging Finance?
Bayside Finance have many clients requiring cash flow to meet settlement dates on personal expenses or the purchase of a dream home. Bridging Finance often assists with a property transfer at the Deeds Office. Many clients apply for Bridging Finance to assist with transfer fees, transfer duties as well as rates and taxes needing to be paid. These costs need be cleared before the Property transfer will be completed.
What factors should be considered before applying for Property Bridging Finance?
It is advised that you consider the following facts before applying for Property Bridging Finance:
- What period do you require the funds for?
- How long will the Deeds office take to complete the transfer?
- Do you have funds available to cover any repayments if there are issues?
- Are there any outstanding costs attached to the property file at the Deeds Office?
- Is there a sale agreement in place with the exact price listed?
- Is the purchase price guaranteed through cash or a bank bond?
Answers to these questions may seem uncertain and daunting but we are happy to advise and have our experts guide you. Contact us or send us an email. You have nothing to lose!
032 815 1114 or email@example.com
What are the Property Bridging Finance Qualifying Criteria?
The following searches and documents need to be in place in order for an individual to apply for Property Bridging Finances:
- Verification of Ownership of the Property (internal Deeds office search will be completed);
- The Property is not subject to any Interdicts or Attachments;
- There are signed Bond and Transfer Documents in place;
- The Purchase Price has been secured through Cash and/or Bank Bond;
- Letter of Undertaking is obtained from the Transferring Attorneys or the Attorney registering the Bond.
Need help with these points? Give us a call! 032 815 1114
How does re-payment of a Property Bridging Advance work?
Once a property transfer has been registered in the Deeds office, the registering attorney will request the settlement figure. This will be calculated and a statement will be emailed to registering attorney. The registering attorney will then deposit the funds directly into the Bayside bank account. Re-payments on such fund advances are made as a lump sum figure.
No agreements will be made without signatures from all parties
Visit our FAQ page for more information on Bridging Finance
032 815 1114