Bridging Finance with Bankwest

Bridging finance from Bankwest can be a helpful tool for navigating the complexities of buying and selling properties simultaneously. It provides a short-term loan to “bridge” the gap between purchasing a new property and selling an existing one.

Understanding the Need

Many homeowners find themselves in a situation where they want to buy a new home before they’ve sold their current one. This often occurs due to market conditions, finding the perfect property quickly, or needing to relocate urgently. Bridging finance allows you to secure the new property without waiting for the sale of your existing home, preventing you from missing out on an opportunity.

How Bankwest’s Bridging Loan Works

Bankwest offers bridging loans with specific terms and conditions. Generally, the loan covers the purchase price of the new property, plus any associated costs like stamp duty. The loan is secured against both your existing property and the new property. During the bridging period, you typically only pay interest on the borrowed amount. Once your existing property is sold, the proceeds are used to repay the bridging loan. The remaining funds, if any, are then available to you.

Key Features & Considerations

Several factors are important when considering a Bankwest bridging loan:

• Loan Term: Bridging loans are short-term, usually ranging from six to twelve months. Bankwest’s terms will depend on individual circumstances and assessed risk.
• Interest Rates: Bridging loan interest rates are generally higher than standard home loan rates due to the increased risk associated with the short loan term. It’s essential to compare Bankwest’s rates with those offered by other lenders.
• Loan-to-Value Ratio (LVR): Bankwest, like other lenders, will have LVR restrictions. The combined LVR of both properties must fall within their acceptable limits.
• Repayment Options: Generally, interest-only repayments are standard during the bridging period.
• Exit Strategy: A clear exit strategy is crucial. Bankwest will assess the saleability of your existing property and its estimated value. A realistic selling price is vital to ensure a smooth repayment process.
• Valuation Requirements: Independent valuations of both properties will be required to determine their market value.

Benefits of Choosing Bankwest

Bankwest offers several potential advantages for bridging finance clients, including:

• Experience and Expertise: Bankwest has experience in the mortgage market and can provide guidance throughout the process.
• Relationship Manager Support: You’ll typically have a dedicated relationship manager to assist you.
• Competitive Rates (Potentially): It’s always essential to compare, but Bankwest may offer competitive rates based on your individual circumstances.

Important Considerations Before Applying

Before committing to a bridging loan with Bankwest, carefully consider the following:

• Risk Assessment: Evaluate the risk of your existing property not selling within the loan term, or selling for less than expected.
• Cost Analysis: Factor in all associated costs, including interest payments, valuation fees, legal fees, and potential marketing expenses for selling your existing property.
• Alternative Options: Explore other financing options, such as renting out your existing property or delaying the purchase of the new property.

It’s highly recommended to consult with a mortgage broker and seek financial advice to determine if a Bankwest bridging loan is the right solution for your specific needs and circumstances. Understanding the terms, conditions, and potential risks is paramount to making an informed decision.