Bridging Loans
Are you a property developer looking for bridging loan, we can assist you with the necessary land subdivision loan to fund your project.
CPL has a list of lenders, both major and non-bank, who are able to collaborate directly with property developers in order to complete subdivision projects efficiently and at a reasonable cost.
We are able to assist with any type of property subdivision or rezoning project, regardless of the size or scope.
What is a Bridging loan?
Bridging loan or bridging finance gives you the flexibility to purchase new property while you are selling your existing one. It can assist with securing a new home/land before selling the existing one. Many prefer to sell their existing properties and use the money to buy a new property but there may be times that buying a new one is more beneficial than selling the existing property. The loan allows a financial bridge between buying and selling, hence the name ‘Bridging loan’.
Typically, a period of 6 months is granted for selling a pre-existing property, while 12 months is allowed for constructing new property. The loan should be paid back within 12 months following the sale of the property.
How Bridging Loans Work in Australia
Bridging loan is a short-term loan that covers the gap between buying a new property and receiving the funds from selling the existing one. It is a type of additional loan that is taken out on top of an existing loan. This essentially means that while you on a bridging period, meaning between selling your old property and settling the new one, you have two loans and are generally being charged interest on both the loans.
It is necessary to provide the proof of your ability to cover the interest costs during the period between purchasing and selling of the property.
However, it is necessary to keep in mind that both your original home loan and the bridging finance loan will need to be paid simultaneously.
Similar to a conventional home loan, it is possible to obtain pre-approval for bridging loan, providing you with the assurance of knowing the amount you could potentially borrow while searching for a new home.
On average, it takes 5-10 days for a bridging loan to be approved by the lender. In more complex scenarios, the approval process can often take up to 21 days, which may vary depending on the lender.
Types of Bridging Loans available
There are two types of Bridging loans that lenders in Australia generally offer.
Open Bridging loans
An open bridging loan is a type of loan that you can access if you are yet to sell your current property and you do not have a date confirmed for settlement.
Typically, bridging loans of this kind can be arranged for a duration of up to 12 months.
Closed Bridging loans
Closed bridging loan can be accessed by you if you have aware of the settlement date and have a confirmed contract of sale of your current property. A closed bridging loan is determined by a mutually agreed upon time frame with the lender.
At the end of the specified timeframe, the remaining principal of the loan, along with any accrued interest and fees, must be paid.
Why use CPL for Bridging Loans
Personalized Service
Purchase or refinance, let us assist you with bridging loan anywhere in Australia
Favorable Terms
Highly competitive interest rates and favorable loan terms from Extensive range of lenders (Banks, non banks & private investors)
Expert Loan Advisors
From Residential subdivisions to large-scale rezoning, finance options for all size developments