Bridging Finance -The Best Short-Term Financial Solution
Bridging finance in NZ bridges the gap between the times when you have already bought a home or another property without selling the existing one. You will need to pay the interest for this loan until the existing property gets sold. It is a short-term loan varying from one month to one year by submitting the property as security.
LoansOne lending partners will use your house as security by registering a caveat over your property. You have to pay the interest-only repayments monthly. Some bridging loans also come with a full capitalization advantage, which means the lender will add the interest and costs to the loan and repayment will occur once the sale property settlement happens.
Some people also apply for bridging loans for use in their business, the available equity in a property being sold can be accessed for any worthwhile business purpose.
Different Types of Bridging Loan Mortgage
As mentioned above, there are primarily two types of bridging funds offered by LoansOne lending partners.
Short-Term Bridging Finance
A short term bridging finance has a known exit strategy in place. In this case, the borrower will know how to pay the funds back within a particular date. Exit strategies for bridging funding are clearly defined, providing a lower risk scenario for the lenders.
For instance, the borrower might need the necessary funds to buy a new property before the current property has settled. In this case, you will have a purchasing agreement and a binding sale for the existing property. It will provide your lender with complete assurance of when and how much funds will be available within a particular date.
Interest only Bridging Loans
With interest only bridging funding, the terms are normally 12 months. They can also be used for business purpose and are a good solution if you want a longer term loan and can service the interest only payments. The equity in your property will be used to secure the bridging loan. The bridging loan can also be extended for another 12 months if needed.
Purposes for short term bridging loans
The most common reasons for which people take bridging finance are as follows.
- Touch up or renovations of your current property before selling
- Providing a deposit necessary for buying a new home
- Repaying the existing short-term loan while selling the house or property
- Purchasing stock for a business
- Marketing or advertising cost
- Consolidating debt before refinancing with the lender
- Taking advantage of a business opportunity
Primary Benefits of Getting short term bridging loans through LoansOne
Most people select LoansOne for short-term bridging finance over other companies because of the following reasons.
- LoansOne can arrange a loan amount of 5,000,000 in a single transaction
- Business partners can quickly settle loans within 24 hours
- Online application process makes apply hassle free
- Access to many lending partners enables the best solution to be found
- Competitive and flexible interest rates for the clients
The application process for Bridging Finance through LoansOne
You can apply for bridging finance in NZ from LoansOne in the following ways.
- Our lending partners assess your application quickly and provide all the terms and conditions within one day.
- If you accept all the terms and conditions, an offer letter is issued including the details like your interest rates, loan terms, fees and outstanding conditions.
- After you accept the terms and conditions and verify your documents, lenders will arrange transfer if the funds to your business account.
But before applying, you should check our eligibility criteria for bridging funding. Some of them are mentioned below.
- 18 years of age is a must for the borrower.
- Permanent resident of New Zealand
- Self-employed or should have a steady income source
- Identity proof like a driver’s license or passport
- Address proof like a bank statement, rates notice or utility bills
- Three months of business bank statement
Things to consider before applying for a bridging loan
Before making any major financial decision, there are also different things to consider before applying for bridging funding.
- Whether you have an unconditional offer on your current home
- The average time of selling in the property market according to your location
- Consider the scenario if your house sells for less than what you have expected
- Plan to handle the situation if your existing property takes more time to get sold
- If you can pay for two loans simultaneously
- Whether you are eligible for a bridging loan mortgage
LoansOne is always by your side to assist with either funding bridging loans when buying and selling a property, or to access the available equity in your home, we aim to make the process easy and hassle-free. If you have further questions about bridging funding, give our friendly team a call to see how we can assist you.
Call us now at 09 888 5252 to learn more about our business bridging loans. You may also drop us a message via our contact page, and we’ll get back to your enquiry as soon as possible.
Frequently Asked Questions
The cost will vary depending on the type of bridging loan and how you are assessed
The equity you have available in your property will determine how much you can borrow. You will need above 15% available equity to qualify.
Yes they do
This will vary depending on the lender and how you are assessed but generally interest rates will range between 2.95% pm to 3.95% pm
Bridging finance is essentially a short term product and designed to be under 1 year
There is a possibly you can still get bridging finance depending on the type of bad credit you have