What is a bridging loan?
The bridging loan is a consumer credit and can finance the purchase or construction of your new home in anticipation of the sale of your old residence, even if your house has not yet been sold. During the transitional period in which you wait for the money from the sale you only pay the interest on the bridging loan singapore (monthly, per six months or annually, depending on your bank). You will only repay the capital at the end of the loan.
In some cases there is no fixed repayment schedule and you can decide for yourself how to repay as long as the credit has been paid off on the agreed due date. For example, some banks allow you to repay all capital and interest only at the end of the loan. A bridge loan therefore offers you the comfort to sell your property at the best price and at the right time while you can already finance your new home.
For whom is the bridge loan intended?
A bridging loan is particularly interesting when you want to buy a new house or new land while your current home has not yet been sold. However, if you expect that your house will not be sold within the term of this loan, it is better to opt for an alternative.
When you take out a bridging loan, you have to take into account that you will often have to pay off a mortgage loan, new furniture, furniture, etc. So make sure that you have all your finances in order before you close your bridging loan singapore.
Through our comparison tool you can compare all loans on the Belgian market and find the most suitable loan for you.
How much can I borrow?
The loan amount depends on the estimated value of the property you want to sell and the mortgage that is still open on your old house. Take this example:
You own a house that you think you can sell for € 300,000, with an outstanding mortgage of € 140,000.
The bank expects that after selling your house you will be able to repay € 160,000 after repayment of your old mortgage. For this last amount, you conclude a bridging loan singapore with your bank.
Your new home will cost € 400,000. For the remaining amount of € 240,000 you call in your savings or you start a new mortgage loan.
If the sales proceeds of your property are overestimated, you will have to adjust the difference yourself. To prevent problems like this, most financial institutions take a margin and borrow up to 80% of the estimated value.
For how long can I borrow and at what interest?
The interest rate of a bridging loan can be fixed or variable. It is usually higher than with mortgage loans but lower than with a personal loan (another form of consumer credit), since the bank has the payout of your old home. Some banks will therefore ask for a mortgage on your old home.
Depending on the bank and your financial situation, you will have to pay the interest per month, per 6 months, annually or at the end of the loan period.
Your house was not sold at the end of the credit
In this case, the bank can offer you an installment plan. The bank may also propose to extend the term of your bridging loan or to convert it into a mortgage loan with an adjusted interest rate.
Posted on October 24, 2018 at 01:29 PM