would you seek a bridging loan

[Noelc]

Hi Guys,
Just another quick question. Our PPOR is up for sale from which we will buy a new PPOR then immeadeatley seek to purchase an IP as our deposit will alow this.

I have delibrately chose not to look for our dream PPOR until I have a buyer for the current PPOR.

But low and behold along comes our dream PPOR up for sale but our existing PPOR has not sold.

What would you do seek a bridgeing loan???

 

[alexlee]

Risky, IMHO. Bridging loans charge high interest.

How about just making an offer on the new PPOR with a longer settlement?
Alex

 

[Kristine..]

Hi Noel

Bridging loans are simply ordinary loans calculated on the 'end debt' with a provision for a few months interest factored in.

They are, generally speaking, no different that any other loan - setting up costs, interest rates, etc - and a good quality loan can capitalise the interest for the time agreed to sell the current property.

So there is only one mortgage payment to make during the bridging period.

However, yes there is some risk, in that you may not sell the first property within the six months of the bridging facility. But then again, a vendor prepared to meet the market will usually sell their property without too much fuss.

Cheers

Kristine

 

[alexlee]

That's another issue. Will carrying two loans cause you to accept a lower price?

 

[Rolf Latham]

Hiya Noel

What Kristine said.

Id only add that if you enough equity and serviceability you can simly run both loans in parallel capitalising interest, and not go down the bridge..........in the old days bridges were damn expensive.

ta
rolf

 

[Rolf Schaefer]

St George has an excellent bridging facility (so does CBA and Heritage).

Just managed one for one of my clients.