A bridging loan is a second short term home loan which allows home owners to buy a new property before selling their existing one. This takes the stress out of trying to line up the sale of the existing house with the purchase of the next.
There are usually a few hoops to jump through to get bridging finance, but we're here to make it easy.
For those that don't quite fit in the 'bank's box' Squirrel have designed our own bridging loan.
We’ve been around the block a few times, so there’s not much we haven’t seen. Tell us your situation and we'll make recommendations to suit.
We deal with more lenders than other brokers, giving you more options.
This means our advice is impartial, and you know you won’t get pushed into a loan you don’t want or can’t afford.
We’ve got negotiating power and access to better rates, so we can make sure the long-term mortgage ends up on a hot rate.
Taking on a bridging loan is an added cost on top of the existing mortgage you’re paying, so banks will look closely to make sure you can afford both loans at the same time.
Bridging loans are set on the floating rate that’s advertised at the time which is higher than the lower fixed rates, but they can be on interest-only terms so that you don’t have to pay the principal during the bridging period. Once the existing property sells and the mortgage is repaid, the leftover balance is fixed.
The main banks tend to be the cheapest option for bridging so your mortgage adviser will approach your bank first. If they aren't prepared to bridge (which is often the case), we have our own bridging loan to consider.
If you're wanting to buy before selling, you'll be looking at getting an open-ended bridging loan. Buyers looking to borrow open bridging loans are seen as a greater risk to lenders, because they’re generally unable to provide a definitive date of when their property will be sold by, (therefore when they'll be able to repay the entire loan).
This means that the process of securing an open bridging loan can be more extensive and often require more equity in your property.
Closed bridging finance is for home sellers that have already finalised their sale terms and lenders prefer this scenario as it has less risk. That's because there's a predetermined date that the house will be sold, which also means a date that the loan will be fully repaid.
For those that don't fit in the 'bank's box' (which can often be the case when it comes to bridging), we have our own bridging loan product. Read about it here.
If you’re planning on selling your place and buying another, here are a few questions to ask yourself to make sure bridging finance makes sense for you. If you’re unsure, we’re happy to help – just give us a call on 0800 21 22 30.
Chances are, you’ll be much more comfortable taking on bridging finance if you already have an unconditional offer on your current property. This means that you will know how much money you can borrow and when you can repay the loan, reducing your personal risk.
We hope that it doesn’t happen, but there’s always a chance that your home might sell for less than you’d hoped. It’s worth thinking about so you can have a strategy in place to make sure you aren’t suddenly burdened with more debt than you can afford.
When you take out bridging finance, you want to be able to commit to a predetermined bridging period. If your home takes longer to sell than you expected, you might not be able to meet the terms of your loan. We can help you put together a backup plan, just in case.
When taking on a bridging loan you need to factor in paying your existing mortgage, plus the potential repayments on the bridging loan, without being reduced to two-minute noodles every day for a month. We can help you work this out.
Sudam was very helpful and quiet patient. He was available to talk and clear our doubts any time of the day. I will recommend Sudam to my friends and relatives .M
Auckland, New Zealand
So grateful for Kyle's and Squirrel's guidance. Ours wasn't a simple transaction, so we appreciated having our hands held throughout the whole process resulting in an easy home purchase. Kyle was so informative and incredible speedy. Thanks so much!M
Excellent service from Kyle. He did a great job arranging our mortgage requirements and kept us informed throughout the process.P
Auckland, New Zealand
I would highly recommend Jessica Molony as she got us into our first home. She was very knowledgeable and helped us right through the process.D
Hamilton, New Zealand
Jessica Molony was brilliant to work with. Was easily available by phone or email and made the whole process seamless. She is a credit to your business.J
We have purchased our first home thanks to Squirrels launchpad package. The team were so helpful, so prompt and kept us informed the entire time we couldn't have been able to do it without them!C
Patea, New Zealand
All communication throughout the process was fantastic. Any queries I had were answered straight away. The Squirrel agent was very good to talk and extremely helpful. Thank you very much for the service.N
Putaruru, New Zealand
Alfonso was helpful and we felt like he had our best interests in mind when arranging the mortgage for us.M
Not only do we have access to more banks than other brokers, but we have a community of over 1,000 peer-to-peer lenders for a custom solution if you don't quite fit the bank's box.