You might have found the dream house that you are looking for. And you will be able to afford it with the cash you have on hand and the proceeds that you will get from selling your existing property. The catch is that the cash flow from your new property purchase and sales for your existing home does not add up.
The scenario is simple. You need to make payment for the new property before you sell your current property. But you will not have enough funds to complete the purchase transaction before selling. If you were to sell your current property to generate the funds to make your new purchase, you can end up without a roof over your head for a few months.
How do you get around this scenario?
A bridging loan addresses this specific situation for you. It gets you the funds required to make your new purchase on condition that you repay the bridging loan when your sale is completed. The loan usually have a tenor of about 6 months.
So before you make a deposit to purchase your dream home, it can give you peace of mind by getting an approval in principle mortgage loan. When you have found a buyer for your current property, present the Option to Purchase to finalise the bridging loan and you are set.
The mortgage loan and bridging loan will usually be offered by the same lender. It saves hassle and prevent legal complications. The whole timeline of such transactions depends on a number of details. If you are in the exact scenario where you require a Singapore bridging loan to buy a piece of property, you can contact us from the mortgage loan Singapore home page and we will go through the whole process with you.