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How to Use a Bridging Loans to Buy Your Next Home Without Stress

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OT Credit Pte Ltd

While selling your existing home, buying a new home can be stressful, especially when time doesn’t align. A bridging loan allows you to secure your new home before your current one is sold. Under this article, explore you can leverage this short-term financing option to buy your next home without unnecessary worries.


Understanding Bridging Loans


Bridging loans, a kind of short-term loan is designed to “bridge the gap” between buying a new property and receiving funds from the sale of your current home. These loans are typically last from few months to a year and secured against your property. It can be structured in 2 ways:


  • Closed Bridging Loan: When a confirmed sale date is there for existing property, this is used, thus, making it less risky for lenders.
  • Open Bridging Loan: When there is no fixed sale date but intending to sell the property, then this loan is used.


How to Use it Without Stress


  • Assess Financial Situation: It is necessary to analyze finances before applying to determine if you can manage the loan comfortably. Consider the loan amount, interest rates, and repayment terms when applying.
  • Choose the Right Loan Type: If your existing home is already under contract, a closed bridging loan is a safer choice due to lower interest rates and if its still in the process of selling, an open bridging loan can be used.
  • Compare Lenders & Loan Terms: As compare to traditional mortgages, bridging loans comes with the higher interest rates. Look for moneylenders offering reasonable terms, lower fees, and flexible repayment options.
  • Avoid Overborrowing: While bridging loans can be convenient, borrowing more than necessary can lead to financial strain. Always stick to a realistic budget and consider additional costs like legal fees, property taxes, and loan charges.


Conclusion


Overall, a bridging loan can be an effective tool for purchasing your next home without stress. It is must to consult with professionals to ensure that a bridging loan aligns with your financial goals and property plans. Connect with OT Credit, a licensed moneylender in Singapore that offers low interest rates bridging loans with 100% security.



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