Quick Bridging Loans: How They Can Help You Get Funds for Owning Property
Recently updated on January 10th, 2023 at 05:01 pm
Finding a good property and not being able to purchase it immediately can be frustrating. If you do not act quickly, other people may purchase the property before you, or you may miss out on a good deal.
Many people find themselves in this conundrum: you want to buy a property right away, but lack the funds.
The good news is: bridging loans can help.
What makes bridging loans great?
Bridging loans provide access to funds quickly. A bridging loan is an increasingly popular alternative to obtain finance to buy a new property. This loan structure can be an ideal alternative if you are waiting for your current property to be sold or if you are waiting for your buyer’s payment to be released. Alternatively, a bridging loan can also be used if you have problems with closing costs.
However, note that the current property’s equity must pass the lender’s criteria and usually will use your current house as security.
The best bit? Bridging loans can be used for both personal or business use.
Uses of bridging loans
Common uses of bridging loans for personal or business use include:
- Renovation and other home improvement projects to increase market value
- Covering costs related to moving, like legal requirements/procedures
- Urgent payment of bills or debts
- Deposit for a new property
- As business capital
Why a bridging loan?
Compared to other loans, a bridging loan usually has a faster approval time, which means that you can get the cash as soon as possible. It also has flexible terms and loan periods.
How can you benefit from getting a bridging loan?
A bridging loan has many benefits, including:
• Gives you instant funds
—You can receive your money often within a few days from application – particularly from specialist lenders, private lenders, non-banks and fintechs.
• Short repayment time
—Unlike other loans, a short-term bridging loan’s repayment time is much less (usually up to 12 months).
• Helps you avoid rushed selling of property
—When you need money as soon as possible, you may feel pressured to sell your property prematurely. A bridging loan helps provide the ‘breathing space’ to have sufficient time to potentially get a better price for your property.
FAQs about bridging loans
1. Do I need proof of income for a bridging loan? What are the requirements?
Each lender has different requirements. At Mango Mortgages, in order to qualify for a bridging loan, we need the following:
- Details about you and your broker (if applicable)
- Details about the property
- Amount of loan needed, purpose of getting a loan and when you need it
- Copy of your most recent council rates notice and mortgage statement
- Note: No proof of income or credit check is needed
2. What is the interest rate?
This depends on certain factors, including credit score, capacity to pay and the lender’s willingness to offer the loan. Learn more about Mango Mortgage’s interest rates here.
3. How much can you borrow?
The amount you can borrow depends on the lender. Usually, a bridging loan allows you to borrow approximately 70% of your property’s value, excluding any outstanding mortgage.
4. How quickly can you get a bridging loan?
It can take from a few days to weeks. At Mango Mortgages, funding can be available within days of the loan approval and receipt of supporting documentation.
5. Are there any early repayment charges?
Again, any early repayment charges depend on the lender.
6. Is there an alternative to a bridging loan?
Australian borrowers are privileged to have access to many types of alternative finance, including:
- Equity loans—If your property has built up equity (value of your home minus mortgage), your home equity can be used to release additional funds.
- Caveat loans—With a caveat loan, a caveat is lodged on the title of your property. This loan type can immediately provide short-term finance to manage the sale and purchase of a property.
- Personal loan—A personal loan can be used for various reasons.
A bridging loan can help you get the funds you need to buy a property. It can also be used for other purposes, including renovations, to help increase the sale value of a property.
If you need quick access to funds for personal or business use, reach out to discuss Mango Mortgage’s quick and easy bridging loans. Our offers are available Australia-wide. You can apply online here.
Since 2001, Mango Credit has helped thousands of Australians explore opportunities by providing short-term financing options.
We have a team of qualified, licensed and experienced lending experts who can help you create effective financial solutions to meet your monetary needs. Mango Mortgages is NCCP-compliant and are completely transparent on our interest rates, fees and other costs.
We also are open to supporting borrowers with impaired or bad credit.