Normally, buying a home means seeking external financing in order to be able to buy it, as this concerns a very large investment of money. In most cases, you go to a financial institution to apply for a mortgage, but what happens if you have already taken out a mortgage loan for another property? In this case, you can apply for a specific type of mortgage to be able to carry out this operation, which is the bridge mortgage.
At Lasose Properties & Investments we explain what it consists of and how you can apply for it.
What could happen is that we find a new home we definitely want to buy, yet we haven’t had enough time to sell the house that we’re currently living in. If we don’t want to miss the opportunity, we can go to a bank to seek a bridging loan.
The bridging mortgage is a banking service through which you can buy a new home without having had to sell your current home. However, this type of mortgage has its own specific operation.
Once the bridging mortgage is contracted, the bank will grant us between 6 months and 5 years to be able to sell the old home. During the months that the house is not sold, the bank will apply the capital grace period – that is to say, during that time the installments that we pay will only be the interest. Once we have sold the old home, the money will be used to pay off the debt of that home and the bank will arrange a new mortgage with which we will be paying for the new home.
In order to apply for a bridging mortgage, we must have a good profile and meet all the conditions that are usually required to obtain an ordinary mortgage. This type of mortgage is very advantageous, since with this operation we can finance the new home without having to have sold the previous one. This affords us some time to be able to sell and make a profit from the old home.