Upgrading or downsizing and Bridging finance:
Upgrading or downsizing.
At Pathway Mortgages, we understand that the decision to upgrade or downgrade your home is significant and requires careful consideration. As you embark on this journey, choosing the right buying and selling strategy is crucial. Let us guide you through the process, offering expert advice and tailored solutions to meet your unique needs.
Upgrading or downsizing.
At Pathway Mortgages, we understand that the decision to upgrade or downgrade your home is significant and requires careful consideration. As you embark on this journey, choosing the right buying and selling strategy is crucial. Let us guide you through the process, offering expert advice and tailored solutions to meet your unique needs.
Assess Your Equity:
Determine the equity in your current home, which will serve as your deposit for the next property, majority of the people forget to exclude expenses such as lawyer fee, Real Estate agent fee, current loan break fee if applicable so it is very important to calculate your deposit for next home.
Selling Before You Buy:
Selling your current home before purchasing another offers clarity regarding your financial position. This approach reduces the risk of overextending yourself and ensures you’re less likely to buy a home beyond your means. However, once your sale goes unconditional, the pressure is on to find a new home quickly. To mitigate this risk, having a backup plan, such as temporary accommodation with family or short-term renting, is advisable.
Buying Before You Sell:
Opting to buy before selling ensures you secure the home you desire. However, it comes with risks, including the possibility of not selling your current home for a satisfactory price or within your desired timeframe. In such cases, bridging finance may be necessary for a short period. Alternatively, renting out your current property while waiting for market conditions to improve could be an option. Negotiating a longer settlement date for your new purchase can also provide flexibility and alleviate some pressure.
Bridging Loans: Your Bridge Between Homes
When you’re eyeing a new home but haven’t yet sold your current one, bridging loans offer a vital solution. Acting as a financial bridge between your old and new properties, these loans provide temporary financing until you finalize the sale of your existing home.
During this interim period, you continue paying your existing mortgage while making interest-only payments on the amount borrowed for the new property, typically at a variable interest rate.
Types of Bridging Loans:
Closed Bridging Loans (Fixed Term):
Closed bridging loans operate with known settlement dates for both properties, though they don’t necessarily align. This means the bridging arrangement ends once the sale of your existing property is finalized. With a maximum term of 12 months, closed bridging loans offer a fixed-term solution for your transitional financing needs.
Open Bridging Loans:
On the other hand, open bridging loans are characterized by the absence of a settlement date for your existing property, which has not yet been sold. This flexibility allows for a maximum term of 6 months, providing a shorter-term financing option for those navigating the transition between homes.
At Pathway Mortgages, we understand the importance of finding the right financing solution to support your property journey. Our team of experts is here to provide guidance and assistance in securing the bridging loan that best fits your needs. Contact us today to explore your options and take the next step toward your new home.
On the other hand, open bridging loans are characterized by the absence of a settlement date for your existing property, which has not yet been sold. This flexibility allows for a maximum term of 6 months, providing a shorter-term financing option for those navigating the transition between homes.
At Pathway Mortgages, we understand the importance of finding the right financing solution to support your property journey. Our team of experts is here to provide guidance and assistance in securing the bridging loan that best fits your needs. Contact us today to explore your options and take the next step toward your new home.
