NEXT HOME BUYER FAQS

Yes, you will need bridging finance but this needs to be negotiated before you sign a purchase agreement.

Yes, but all are based on a short term loan as interest rates can be higher and you will be servicing two loans while the bridging loan remains open.

Definitely. But in case you have no funds available, you could try a deposit bond as an alternative. A deposit bond can replace cash deposits, guaranteeing the purchaser the deposit amount. Organizations that provide deposit bonds serve as guarantor.

Minimum repayment amounts are determined via an interest only basis. Depending on your lender, you may or may not be able to capitalize every single repayment up to the completion of the sale. However, be advised that this particular option will increase the peak debt. Higher peak debts will pump up your loan’s overall interest.

Bridging finance is usually allows for a six month period for the existing property to be sold. In the case of constructing a new property, the common limit is up to year. New arrangements will be arranged once the limit is reached and the property is still not sold. In a number of states, the standard settlement could take around 6 weeks.

The answer lies on the status of the housing and the rental market. Another factor that could help you decide is the amount of your mortgage in relation to the interest rate you would pay compared to the kind of property you intend to acquire and the amount of the rental payment.

It depends on your lender. There are some who would let you decide whether you want to capitalize your repayments or continue with the repayments. Should you choose to continue with repayments, the total amount of your mortgage will stop ballooning. Repayments would also limit the additional interest payments on your loan.