Bridging Loans: Your Guide to Buying Before Selling

A bridging loan can help you buy your next home before selling your current one, covering the gap so you don’t miss out on your dream property. Here’s what you need to know.

How Does a Bridging Loan Work?

Bridging finance is a short-term loan that funds your new home’s purchase until you sell your existing property.

When is the Right Time to Sell?

Knowing when to sell can depend on seasonal trends or market conditions:

• Spring usually brings higher buyer activity, while winter offers less competition, meaning your property may stand out.

• In a seller’s market, homes sell quickly; in a buyer’s market, patience is key.

Selling First vs. Buying First

• Selling First
  Pros: Know your exact budget, no bridging loan required, and can take time for the right sale price.
  Cons: Risk of needing temporary housing and dealing with rent or storage costs.

• Buying First
  Pros: Avoid renting, enjoy a rising market, and avoid rushed decisions.
  Cons: Likely need a bridging loan, pay higher interest for a period.

Bridging Loan Alternatives

• Negotiate a longer settlement on your sold home to give yourself more time to find a new one.

• Rent back your home from the new owner for a transition period.

• Consider short-term accommodation with your belongings in storage.

Bridging loans can make a quick transition possible, but they come with financial risks. If you’d like to explore whether bridging finance is right for you, reach out to me for a chat!