When you take out a bridging loan, you’re buying a new home before selling your current one. That means, for a short time, you’ll own two properties.
Because of this, the lender needs to make sure they’re protected — just in case something doesn’t go to plan.
That’s why they use both your current home and the new property as security.
Here’s what that means:
• It reduces risk: Until your old home is sold, the lender is exposed to a bigger loan. Securing both homes gives them extra peace of mind.
• It helps you borrow more: By using both properties, you may be able to access more funds to make the move happen.
• It protects you too: The lender can offer better terms knowing there’s a solid backup if your sale is delayed or the price is lower than expected.
Once your old home sells and the bridging loan is paid off, everything returns to normal — and you’re only left with the mortgage on your new home.
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