All you need to know about the bridging loan

bridge loan

Do you want to buy a new property before selling the old one? It is possible and without advancing personal funds, thanks to the real estate bridging loan. So, to know everything and know its characteristics, follow the guide!

house, gold coins and calculator for mortgage loan conceptual


What is bridging loan?

bridging loan?

The bridging loan is by definition a transitional real estate loan which will make it possible to buy before having sold by providing buyers with a partial advance. This advance generally represents 60 to 80% of the value of the property to be sold. So no need to sell in a hurry or sell off your home to have cash quickly.

This formula is, in fact, granted for a relatively short period of time which never exceeds two years.


How is a bridging loan granted?

loan granted

Before being granted this type of credit, your bank will call on a real estate professional who will give a fair estimate of your property, while taking into account the current state of the real estate market and the scarcity of housing.


Dry or back-to-back loan?

back-to-back loan?

You may not know it, but there are two types of bridging loans in this area:

The dry “
It allows you to repay in small monthly payments which often correspond to the interest on the credit. Once the deed of sale has been finalized, you pay off your entire loan once or twice.

The “back-to-back”
It is offered to individuals who, in addition to selling to buy, need to borrow additional funds. The monthly repayments are then “smoothed” and the same amount for the duration of the credit.


What if my old property does not sell?

What if my old property does not sell?

Lack of offer or canceled promise to sell… the most urgent thing is to notify your bank and ask for an extension of the duration of your bridging loan, otherwise you will have to drastically lower the price of your property for sale. But do not panic, most banking establishments offer contract extensions so as not to find themselves in inextricable situations.

And you, have you ever taken out a bridge loan? Were you satisfied with this formula? Tell us about your experience, the blog is there for that!

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