Online Signature Legitimateness for Home Loan in Australia with airSlate SignNow

How to eSign a document: online signature legitimateness for Home Loan in Australia

thinking about getting a bridging Loan in this video I'm going to uncover all the reasons you should avoid them so let's jump in a bridging loan lets you purchase a new home while giving you the time to sell your current one and it works by letting you first buy and then second sell your existing home and it means temporarily you'll own two homes at the same time there are three main benefits of a bridging loan first it gives you breathing room to sell your home generally you'll have a whole year to do so ensuring that you can find the perfect buyer for your home secondly it eliminates the worry of selling your home without securing the next essentially you get to purchase your new home before selling your existing and finally it allows you to take on more debt than the bank would ordinarily lend you it's because your assessment is based on your final position after everything is settled and not at the peak when you own both properties let's break down how a bridging loan actually works say you own a home with seven hundred thousand dollars with a mortgage of one hundred thousand dollars you're looking to upgrade and buy a home for a one million dollars the trouble is that your borrowing power is only 500 000 this is a maximum that the bank is willing to lend to you based on your eligibility criteria and fifty thousand dollars in savings a bridging loan is divided in two parts Peak and end debt Peak debt is a total amount you owe when you hold both properties in our example we can see we need a million dollars for the purchase plus an estimated thirty eight thousand dollars for additional costs this means that the peak debt would be approximately 1.09 million dollars the end debt is what's left after you sell your initial property and using our example if the sale price of the original property is 700 000 with real estate agent fees of twenty five thousand dollars the end debt would be a approximately four hundred and thirteen thousand dollars and even if the peak debt was more than your maximum borrowing power the bank evaluates your to your eligibility base pay for the basics let's deep dive into why you might want to think twice before getting a bridging loan we'll use Saint George as our reference point and they're one of many banks offering bridging loans however the principles we discuss are common across all lenders when you first apply for a bridging loan the interest rate you'll hear pertains to your end debt essentially what you'll owe post sale of your home and as we can see here rates here start from 5.94 but there's a catch Banks charge a different interest rate for the bridging period And as you can see here these rates start from 9.05 percent revisiting our earlier scenario let's dissect the real costs tied to a bridging loan as previously explained we have a house worth seven hundred thousand dollars with an outstanding mortgage of one hundred thousand dollars our aim is to buy a property price at one million dollars and factoring in all relevant fees and charges with fifty thousand dollars in savings that total amount we'll need to finalize a purchase is close to 1.09 million dollars now here's the kicker as highlighted before the bank charges a 9.05 interest rate for the bridging loan facility and in this scenario amounts of 56 000 and is the real reason you'll want to avoid a bridging loan even if you have the bridging loan for a few months it will cost close to fifteen thousand dollars just for the convenience and when you take everything into consideration there's simply no justification many opt for a bridging loans simply because they're unaware that they have other choices and here are four other strategies which will achieve the same result without the price tag one subject to sell whether you buy or sell first include a subject to sell clause in your contract as an example if you're buying condition your offer on the sale of your current home this means that your Finance on the purchase will be subject to the unconditional sale of your home on the sale two extended terms consider opting for an extended settlement duration this is where you either agree to sell or buy your home with a longer settlement period as an example if you get an offer to sell your home with a 30-day settlement Clause look to extend this to 90 days this will provide you ample Runway to find and purchase your next property three simultaneous settlement this approach might be uncommon but it's entirely feasible simultaneous settlement involves buying and selling at the same time essentially the funds from your sale directly facilitate your purchase and is a great option as it allows you to avoid a lot of the fees such as a bridging loan or having to rent before listing your property for sale know the exact type of home you're looking to buy be specific in what you're after and have no more than three suburbs on your short list you'll need to be a suburb expert to pull this off because the moment you list your property time is of the essence for selling your home them first another approach is to sell your home before you buy a new one the biggest challenge is once you've sold your property you'll need to secure a place to stay be it a rental or moving back in with the family the transition often brings additional expenses however there are ways to navigate this one solution is to arrange a rent-backing agreement on your property you're looking to sell this means that the new owners would lease a property back to you for a predetermined period you can establish a rental contract for yourself prior to selling this ensures that the ongoing lease agreement is honored but a word of caution this might make your property less appealing to potential buyers especially if the rent is under market value and if you're looking for a great mortgage broker here at Hunter Galloway we can help we service australia-wide and don't charge a fee for our service so reach out and call us on thirteen hundred zero eight eight zero six five or visit us online at huntergalloway.com thanks for watching and until next time okay catch you then