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Bridging the gap

30 NOV 1999 • By Phillip Tarrant • 2 min read • Hotspots

Bridging finance might just be the solution for your buying and selling cash flow concerns.

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When you’re on the hunt for a new home, chances are the sale of your existing place is unlikely to align perfectly with the purchase of your new home.

That means that most sellers are faced with the daunting prospect of either shouldering the burden of two mortgages should they buy before their home has sold, or a stint in rental property while they find a new home.

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If you can’t face the prospect of weeks or months living out of cardboard boxes in a short term rental or a motel, then a bridging loan may be the solution you’re looking for.

How does it work? In general terms a bridging loan can be used to cover your financing requirements if the sale and purchase settlement dates of properties differ by a short period. It can also offer you a solution for a longer period of up to six or 12 months, if, for instance, you’ve found a new property but are yet to have sold your existing home or perhaps haven’t finished building your new one.

Like any home loan you will accrue interest on the amount borrowed. Your repayment requirements will depend on the lender but in most instances it will be interest only. In some cases no repayments will be required at all, but it is always wise to make repayments to avoid your interest obligations spiralling out of control.

To bridge or not to bridge? While it may sound like an ideal solution, bridging finance requires careful consideration – just like any other financial decision. Be sure to seek professional, sound advice tailored to your individual circumstances and needs. We can help you determine whether bridging finance is your best option, or if perhaps another solution, such as renting between properties, will work out better – so give us a call.

BENEFITS OF BRIDGING • You can buy a new home without worrying about selling your existing home first

• If you’re building a new home you don’t have to worry about renting in between

• There is less pressure to sell your existing home quickly, meaning you won’t be pressured into accepting a lower sales price

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Phillip Tarrant

Phillip Tarrant

AUTHOR

Phillip Tarrant is executive editor – Real Estate at Momentum Media. He is also an investor with a large property portfolio.

He leads the content strategy and corporate growth for a range of market and business intelligence platforms at Momentum Media, including Smart Property Investment – the authoritative voice for Australia’s property investment community.

As head of the Smart Property Investment Podcast Network, he also steers the largest network of property podcasts in Australia, which collectively generates nearly 2 million downloads every year.

There are over 2.6 million investment properties in Australia, with over 2.1 million Australians (or around 8 per cent of all Australians) owning one or more investment properties. A vibrant and critical sector for creating wealth for Australians, the property investment sector is expected to remain a pillar to the national economy.

For nearing a decade, under Phillip’s stewardship Smart Property Investment has been informing and educating property investors on the tactics and strategies to create wealth through property.

Trusted by over 100,000 Australians each month as the turn-to independent resource for property market insights and information, the brand supports the mantra of "for investors", by investors’, drawing on the unique position that Phillip and Smart Property Investment share, warts and all, its own journey through property.

The Smart Property Investment Show, part of the Smart Property Investment Podcast Network, is one of Australia’s most popular podcasts, forming the keystone of an integrated digital platform delivering daily property updates, live broadcasting, insights, opinion and data to property investors across the nation.

Underpinned by a content team universally recognised for their knowledge of the sector and approach for clear and concise communication, Smart Property Investment has become a central part of Australia’s property community.

About Momentum Media

Momentum Media is a leading media and market intelligence company, and the business behind Smart Property Investment, REB and RPM.

Guided by a strong sense of purpose to support our communities, Momentum Media has forged its place as one of Australia’s most influential media and professional development businesses.

We have been equipping Australia’s corporate, investor and SME sectors with market and business intelligence for over a decade.

Across an integrated business supported by digital, events, broadcast, research, print and social platforms, we are guided by the purpose: Be Better informed.

This passion for informing, educating and inspiring drives us to build more engaged communities, delivering greater leadership to the markets we connect to and forging closer relationships with our audiences.

Being at the forefront of media innovation, backed by a pioneering spirit, has been central to Momentum Media’s growth.

We’re an evolving, forward-thinking business based on a purpose that supports corporate Australia and the markets critical to our nation’s economic prosperity and security. We’re also focused on delivering exceptional value to our commercial partners.

We adapt on a daily basis to rapidly changing market places; we’re a fluid media business, unanchored to any particular technology, channel or tone of communication.

With a reach spanning nearly 2 million professionals, high-net-worth individuals and SME business owners, we’re connected to the rapidly changing preferences and attitudes of our communities – and we’re making a positive contribution for our communities to thrive.

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