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ISCOVER
We’re here to bust some common misconceptions and set the record straight on bridging loans, what they are and how they can help your client’s purchasing ambitions.
The perceptions of bridging loans can be pretty different to reality. As a lesser-known type of home loan, it can be tough to get an accurate definition of what a bridging loan is and how it works.
We’re here to bust some common misconceptions and set the record straight on bridging loans, what they are and how they can help your client’s purchasing ambitions - helping them feel equipped to make informed decisions about their next move.
Bridging loans are a great flexible and cost-effective way to finance the next property purchase while waiting to sell the existing home. There are a range of reasons homeowners may not want to sell their property at the time of purchasing a new home, whether that’s property market conditions or other personal circumstances.
That’s where Bridgit comes in - we ‘bridge’ the gap between the purchase of a new property and the sale of the current home. Whether your client is upsizing, rightsizing or downsizing, bridging loans are a great flexible, cost-efficient way to progress on their own terms.
Let’s dive into five of the most common myths about bridging loans and what you need to know.
Myth 1: Bridging loans are used as a last resort
Historically, bridging loans were viewed as loans for homeowners who have left financing too late or were unsuccessful at applying for traditional home loan products.
In reality, bridging loans can be a first choice to support short-term strategies for homeowners. Bridging loans offer increased flexibility to help plenty of homeowners, whether your clients’ are upsizing, downsizing or anything in between.
Bridging loans are a great choice if:
- Your client has found their next dream home but hasn't sold their existing
- Is looking to skip the hassle of paying rent and moving around in the meantime; or
- They need to make an investment in renovations before selling their property.
With greater control and flexibility, your client won’t have to worry about getting the timing perfect when selling their current home and purchasing the new property. Bridging loans are a convenient and low-risk way of tapping into built up property equity to fund the next purchase.
Myth 2: Bridging loans are complicated and stressful
Bridging loans are often perceived as complicated, stressful, and a bit of a pain to get approval for. Part of what makes people think bridging loans are complicated and stressful is its unfamiliarity, particularly if they’ve never heard of this loan type before.
But, the market has certainly evolved, and here at Bridgit, we are making bridging loans more common. We aim to take the stress out of bridging loans with our purpose-built tech and quick online application process (that can help you score approval within 24 hours). We’re an inclusive lender, meaning we consider all different types of borrowers (including self employed and retirees), and have flexible lending criteria.
Our ultimate aim is to take the stress and hassle out of securing bridging finance with a digital loan solution that’s fast, convenient and helps people progress through property. We have a dedicated partnerships team here to support you and your clients through the entire process.
(Retirees Mark and Kay received Bridgit loan approval in just one hour and were able to downsize to their next dream home)
Myth 3: Bridging loans are expensive
Another common misconception about bridging loans is that they are expensive solutions to accommodate ‘last resort’ property circumstances.
However, Bridgit’s rates are extremely competitive, offering cost advantages with a 3-month interest-free period and saving on temporary living and moving expenses.
The other advantage is that there are no repayments until maturity and no double mortgages. We take over the first mortgage so your clients can progress and move on their terms.
Myth 4: Bridging loans are slow to be approved
In many cases, bridging loans are viewed as a slow-to-be-approved product with lengthy and painful wait times. However, Bridgit’s process looks a little different, designed to make your life easier.
Unlike other lenders, Bridgit provides a simple online application process that takes just a few minutes to complete. Our digital-first solution means we offer 24-hour approvals with quick settlements, saving you time on long and tedious paperwork.
How? Well, we’ve built all our own tech from scratch and harnessed tools like credit modelling and machine learning to automate the review process. Plus, being a paperless business means we won’t slow you down with printing, faxing or filing.
Myth 5: Bridging loans result in double mortgages
Homeowners tend to assume mortgages are managed concurrently, and they will end up having to make payments on both mortgages.
When you are approved for a bridging loan, the lender generally takes over the mortgage on your current home, financing the purchasing of your new home. This can sometimes include other costs associated with purchasing, such as stamp duty and lender fees.
At Bridgit, we pay your existing mortgage, meaning your clients don’t have to worry about paying two mortgages at once. Plus, we offer no monthly repayments, so your clients can focus on the important things, like finding their next home.
Now that we’ve busted some common myths, you’ll have more knowledge on how to make informed decisions about your client offerings. While there are plenty of misconceptions flying around, the truth is that bridging loans are a powerful way for homeowners to save on temporary living costs and jump on the best opportunities.
Ready to find out more about Bridgit’s bridging loan? Discover how a Bridgit loan can help you, and your clients, progress.
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