Bridging Finance
A short-term loan used to assist with the financing of a new property before the sale/settlement of your existing home or property.
ASCF can provide both consumer and commercial clients the opportunity to ‘bridge the gap’ when investing, buying, or transitioning into your next property before your current property sells. With a variety of different bridging products designed for both owner-occupiers and investors, ASCF can make it easier to purchase new residential property, commercial property, or vacant land.
ASCF bridging loans can offer flexible terms ranging from a few days up to 12 months, with the interest charged on the loan capitalised to the initial advance. Interest is only charged for the number of days the bridging facility is required, with any unused interest credited back against the final discharge amount.
Subject to equity, ASCF can also fund the stamp duty and associated purchase costs, as well as the selling agency’s marketing costs, and any funds you may require to improve the current property before listing it for sale. ASCF will take a 1st mortgage over the property being purchased and can take a 2nd mortgage over the property being sold (subject to the first mortgagee being a traditional bank or a non-bank lender).
Where there is no ‘end debt’ once the sale property has settled, the bridging facility can be structured with fully capitalised interest, meaning ongoing monthly serviceability is not required during this period, subject to a verified exit strategy.
In the event there is an ‘end debt’, ASCF, as part of its responsible lending guidelines, will verify that the borrower(s) can service the debt before refinancing to a traditional bank/non-bank lender.
Below is an example of how ASCF assisted a previous borrower with a Bridging Loan:
What is a Bridging Finance?
Benefit Title
Benefit Description
Case Study
When a client faced challenges funding their new land purchase before selling their current home, ASCF provided a quick and flexible bridging loan solution to make it happen.
Exit
Once the customer sells their current home, they will repay the 1st mortgagee and ASCF in full. If they manage to sell prior to the end of the term, we will rebate the unused interest.
Solution
Given there was no forecast of end debt once the customer sold their existing residence, we were able to provide a $467,000 loan against a 1st mortgage over the land and a 2nd mortgage over their PPR, at an LVR of 63.75%, for a 4-month term.
Problem
A broker approached ASCF seeking a bridging loan for a client who had contracted to purchase a residential block of land in Burrum Heads, QLD. The customer already had a mortgage on their principal place of residence in Highland Park, QLD, but required the funds from that sale to complete the land purchase, as they could not demonstrate servicing on the proposed peak debt.