Making moves in the property market can sometimes land you in urgent situations where you need quick access to funds for just a short period of time to cover a funding shortfall.
Securing Short-Term Property Loans
One way to solve these situations is to apply for a short-term property loan that is secured against your assets. You can secure a short-term property loan using both residential and commercial assets, using any equity that’s held in your name.
Fast Approval and Fund Release
This is why short-term property loans are able to be approved quickly and able to have the funds released in a flash. You can often get access to the funds from a short-term property loan within days, and they are usually paid back from anywhere between six months to a year. It can be a great way to get around funding delays on longer loans for time-sensitive transactions such as property settlements.
Bridging Loans for Property Investments
One of the more common short-term property loans and one you might have heard of is bridging loan. Bridging loans are used when buying a new property while an old property has not sold yet or where there is not quite enough funds available for an investment.
While short-term property loans can save you money through keeping a deposit that might have been lost if you were otherwise unable to meet settlement terms, they are more expensive than traditional, longer loans. Due to the fact that the finance is short in nature and is approved so much faster, there is more risk to lenders and they compensate through higher interest rates accordingly.
The idea behind these short-term, or ‘bridging’ loans, is to get you across a short time-period while you get final approval from your lender on a longer-term loan featuring much lower interest rates.
Common Scenarios for Short-Term Property Loans
The most common scenarios where a short-term property loan can work for you include:
- Completing an urgent, time-sensitive property settlement
- Buying property while waiting for your collateral property to sell
- Buying property while waiting for a traditional loan to settle
- Not having enough funds for a property purchase and settlement
- Paying off builders
