If you’re an existing homeowner and you want or need to move, there’s a lot to be said for moving into your new property before you sell your old one. The main advantage is that you know you have somewhere to go. This saves you either having to rush to find a suitable property in a rush or having to rent somewhere and then move again once you find somewhere suitable.
The challenge, however, is carrying two mortgages at once and this is where bridging finance can help. Essentially, bridging finance is a special type of loan which allows you to pay off the mortgage on your existing property by replacing it with a short-term loan which is paid off when your old home is sold.
Bridging loans can be expensive and if your existing home takes longer than you’d like to sell (for example a sale falls through) you may have to start making repayments while paying your new mortgage. On the other hand, it can be worth paying for convenience, especially if you have children and want to move in the school holidays so that you can get them settled into their new home before they have to go back to school.
Some bridging finance is not regulated by the Financial Conduct Authority