Buying your next home

01.

Bridging Loans

Bridging loans are short-term financing solutions used to facilitate property purchases when there's a delay in selling an existing property or funds aren't immediately available. They offer quick access to funds with flexible repayment options, typically interest-only, but come with higher interest rates and fees due to their short-term nature. These loans are favoured for their speed of approval and funding, making them suitable for competitive property markets or time-sensitive purchases like auctions.

02.

Cross-securitisation

If your leveraging equity in an existing property to purchase an another property, never cross-secure the two securities with the two debts, even if this means paying double the application fees. This is to avoid the bank having control over what you want to do with your properties and keeping that power in your own hands. If ever you want to sell one of your properties, as it has appreciated in value, the other security and it's debt can limit your earnings.  

03.

Deposit Bonds

Deposit bonds are used as an alternative to paying a cash deposit upfront. They act as a guarantee to the seller that the buyer will fulfill their contractual obligations. This allows buyers to secure a property without tying up their funds in a deposit immediately, offering more flexibility in managing their finances. However, it's important to note that deposit bonds usually incur fees and may require the buyer to meet certain eligibility criteria set by the issuer.

04.

Loan Features

Loan features determine borrowing costs and terms. P&I loans involve paying both interest and principal, gradually reducing the balance, while Interest Only loans require only interest payments initially, potentially increasing overall costs. Fixed-rate loans offer stable payments over a set period, while variable-rate loans fluctuate with the market. Offset accounts reduce interest by offsetting savings against the loan, and redraw facilities allow access to extra repayments. Choosing the right features hinges on individual financial needs for cost-effectiveness and flexibility.