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Bridging the Gap Between Selling & Buying - Decoding Bridging Loans
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Episode 10 – "Bridging the Gap Between Selling & Buying - Decoding Bridging Loans”
In this 10th instalment of TFS WealthCast, Vishi and Pramu demystify bridging loans a topic many homeowners find confusing. They explain how a bridging loan provides short‑term finance to “bridge” the timing gap between selling your existing home and purchasing your next one.
The loan combines a regular mortgage on the new property with a temporary line of credit for the down payment and closing costs until your current house is sold, allowing you to move ahead without waiting for settlement.
Pramu notes that bridging loans are typically interest‑only and run for a few months (often 3–6 months), with slightly higher rates but manageable overall cost. The pair discuss the critical role of valuations and why most lenders require that both the existing and new loans stay with the same bank to simplify underwriting.
The conversation also tackles common myths: some buyers try to fund deposits with personal loans or family help, but Pramu warns that such approaches can lead to chaos and risk delaying settlement. They also draw a distinction between bridging loans and deposit bonds, and explain why using a broker early in the process is vital for smooth approvals. For seasoned investors, bridging loans are framed as another tool alongside second mortgages and debt recycling to expand a property portfolio without missing out on opportunities.
The episode finishes with practical tips on structuring a bridge loan, budgeting for the higher temporary interest rate, and understanding when it’s worth paying a premium to avoid missing your dream home.
Whether you’re upsizing, downsizing or juggling multiple transactions, this episode arms you with the knowledge you need to decide if a bridging loan is right for you.
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