Selling property doesn’t always go as smoothly as it should and transfer delays can cause sellers cash flow issues. Fortunately, property bridging loans can offer financial relief during this stressful time.
What is a property bridging loan?
A property bridging loan is short term cash loan that is based on the anticipated proceeds from a property sale. These loans can help you cover expenses while you are waiting for property transfer to take place and the proceeds to be paid into your account.
Because transfer takes an average of three months, property bridging loans help sellers cover upfront costs such as moving companies, rental deposits, municipal rates clearance, compliance certificates or even transfer costs on a new property.
Benefits of property bridging
Property bridging loans have several potential benefits.
Payment is fast
Turnaround time on a bridging loan is usually fast, meaning you don’t need to stress for weeks on end about whether or not you have been approved. Once approved, the loan amount is deposited directly into your bank account.
No long-term debt
Bridging loans are short-term loans, so you don’t need to worry about getting yourself into long-term debt which could affect your credit score. Bridging loans are paid back in full once the proceeds of the sale come through.
Financial peace of mind
Although a property transfer typically takes about three months, there’s no guarantee that it won’t take longer, even when things go smoothly. Other complications, such as the buyer’s tax not being in order, can delay things further.
A bridging loan allows you to make solid plans, even while the transfer is still in progress. For example, the loan may enable you to go ahead and book moving companies, make travel plans and pay rental deposits.
No delay on your offer to purchase
If you spot the perfect new property, a loan may be sufficient to enable you to make an offer to purchase, rather than waiting and taking the risk of losing out to another buyer.
You can buy out a co-owner
If you are selling a property that you co-own and your co-owner needs to get paid out immediately, then a property loan can cover the cost of buying them out. This is particularly helpful if the reason for selling was a co-owner’s financial difficulties.
Bridging loans with lamna
If you need property bridging finance, lamna can provide a hassle-free loan until such time as you receive the proceeds from the sale of property. All you need to do is submit the signed deed of sale, signed transfer documents and guarantees for the purchase price.
An overview of all the costs involved in selling your home in South Africa, and how bridging finance can help.read more
Everything you need to know about getting a bridge loan on your property sale in South Africa.read more
What is a bridge loan and how can it benefit you?read more