A bridge to your dream home
Upgrading to your next home is exciting, do you wait until your current home is sold to start house hunting.
Bridging loans – buy before you sell
Home Buying Help - Buy before you sell:
Whether you’re upsizing, downsizing or relocating, making the move to your next home can be exciting. You’ve probably built up some home equity, and for whatever reason, you’re on the lookout for the next property to call home.
The question is, do you wait until your current home is sold to start house hunting or sell first? What if you see a place you’d like to buy before your home is sold? The process can feel a little daunting.
How bridging loans work
As the name suggests, bridging loans act as a bridge that spans the funding gap between buying a new home and selling your current property.
It lets you buy a dream home even if you’re still waiting to find a buyer for your old home. That said, bridging loans are a type of home loan, and before taking on any sort of debt it’s important to weigh up the pros and cons.
It lets you buy a dream home even if you’re still waiting to find a buyer for your old home. That said, bridging loans are a type of home loan, and before taking on any sort of debt it’s important to weigh up the pros and cons.
The upside
It’s a short term debt. We offer up to 12 months from the date of settlement of your new property to repay your Community First Bridging Loan. This is likely to be ample time to sell your old home.
You don’t have to miss out on an ideal property. Using a bridging loan means your dream home doesn’t have to be ‘the one that got away’.
No need to make monthly repayments. Our bridging loans are interest-only, and unlike some banks, we don’t ask you to make repayments on the bridging loan during the 12 month loan term. Instead, we deduct the value of the accrued interest from the sale proceeds of your current home.
You can minimise moving costs. A bridging loan means you only have to wear the cost (and hassle) of moving once. On the other hand, if you sell before buying elsewhere, you could be up for rent on temporary accommodation, and have the added expense of moving furniture twice.
The downside
The interest rate is generally higher. However, the maximum loan term is 12 months, and most members don’t need the bridging loan for the full term. This helps to keep a lid on the interest cost. Even so, the accrued loan interest will eat into the sale proceeds of your home.
Your existing home may not sell in time, which could create stress and pressure you into taking an offer lower than you’d expected.
Bridging Loans can be complex in structure, and you need be sure the cost won’t be the make or break factor that could stop you from financing your new home. That’s why you should engage with a Mortgage Specialist; they will explain how a bridging loan works and can assist you to purchase your new home sooner.
To learn more about Community First’s Bridging Loan - and if it is the right choice for you – get in touch with us or visit your nearest Community First store. You can also head to our Bridging Loan page on our website.
Credit eligibility criteria, terms & conditions, fees & charges apply. Community First will need to hold a first registered mortgage over any properties being taken as security. Where a bridging loan is taken, all loans must be held with Community First. The maximum LVR during the peak debt is 70%.
Community First Credit Union LimitedABN 80 087 649 938 | Operating as Community First Bank | AFSL and Australian credit licence 231204| BSB 512-170