As a pharmacy assistant considering property investment, you might find yourself in a common scenario: you've found the perfect investment property but haven't yet sold your current home. This is where Bridging Finance becomes invaluable, allowing you to bridge the gap between buying and selling properties.
Understanding Bridging Finance for Investment Properties
Bridging Finance refers to short-term loans designed to help property investors purchase new properties before selling existing ones. These loans typically have a loan term of 6 to 12 months, providing sufficient time to sell your existing property or complete construction if you're buying a new build.
For pharmacy assistants looking to expand their property portfolio, bridging loans offer flexibility in timing your property transactions. Rather than missing out on investment opportunities due to timing constraints, you can secure the property first and manage the sale of your existing home at your own pace.
Key Components of Bridging Loan Structure
When applying for a Bridging Loan, lenders will assess several key factors:
• Peak Debt: The maximum loan amount when you own both properties
• End Debt: The remaining loan balance after selling your existing property
• Loan to Value Ratio (LVR): Typically capped at 80% to avoid lenders mortgage insurance (LMI)
• Contract purchase price: Of the new investment property
The application process involves providing bank statements, income verification, and property valuations. Many lenders now offer a streamlined application process for qualified borrowers with strong borrowing capacity.
Ready to get started?
Book a chat with a Finance & Mortgage Broker at Pharmacist Home Loans today.
Should You Buy or Sell First?
This decision depends on your financial situation and the local property market conditions. Buying first with Bridging Finance offers several advantages:
- Market timing: Secure attractive investment properties when available
- Negotiation power: Purchase without sale contingencies
- Reduced stress: No rushed timeline to vacate your current home
- Rental income: Begin generating rental returns immediately
However, consider the additional costs including stamp duty on the new property and interest capitalisation during the bridging period.
Bridging Loan Rates and Repayment Options
Bridging Loan Rates are typically higher than standard home loan or investment loan rates, reflecting the short-term nature of these facilities. You'll encounter both variable interest rate and fixed interest rate options, though variable loan rates are more common.
Calculating Bridging loan repayments involves understanding interest capitalisation, where interest payments are added to the loan balance rather than requiring monthly payments. This reduces immediate cash flow pressure whilst you manage both properties.
Many lenders offer offset account facilities, allowing you to reduce interest charges by maintaining savings balances against the loan amount.
Accessing Bridging Loan Options Across Australia
Pharmacist Home Loans can help you access Bridging Loan options from banks and lenders across Australia. Different lenders offer varying:
• Interest rate discounts for existing customers
• LVR limits and LMI requirements
• Loan approval timeframes
• Exit strategy requirements
Some lenders may offer loan pre-approval, providing certainty when making property offers. Getting pre-approved strengthens your position as a buyer and demonstrates serious intent to vendors.
Strategic Considerations for Pharmacy Assistants
As a pharmacy assistant, your steady employment history and income stability work in your favour when applying for bridging finance. Lenders appreciate the healthcare sector's job security, which can positively influence your loan application.
Consider timing your property purchase with your existing mortgage review. This might unlock better rates or additional borrowing capacity for your investment property strategy.
Remember that bridging finance is a short-term solution. Having a clear exit strategy—whether selling your existing property or refinancing into permanent investment loan facilities—is crucial for successful property investment.
Bridging Finance provides pharmacy assistants with powerful tools to build investment property portfolios without being constrained by sale timing. By understanding the loan structure, costs, and strategic applications, you can make informed decisions about your property investment journey.
Ready to explore bridging finance options for your investment property purchase? Call one of our team or book an appointment at a time that works for you to discuss your specific requirements and access competitive bridging loan solutions.
