You want to buy your next house but the money is in the current one, that has not yet been sold. For this gap there is a specific tool: the bridge mortgage. Well used, allows you to buy without underselling; misunderstood, It can put you in two installments that you cannot pay. This is how it really works.
What is a bridge mortgage
The bank groups the outstanding mortgage on your current home and the financing of the new one into a single loan., giving you a deadline—usually between 6 months and 5 years—to sell the first. while you sell, you pay a reduced fee (often lacking capital: only interests). When the sale arrives, The corresponding part is paid off and the loan becomes a normal mortgage on the new house.
What the bank is going to ask you
The bridge mortgage is a product for solvent profiles: income capable of supporting the joint fee if the sale is delayed, and a comfortable appraisal value between the two homes (Banks usually finance up to the environment of the 80% of the joint value). Count on the entity to also assess how salable your current house is.: area, price and condition matter.
The three possible installments during the bridge
According to the entity, during the bridge period you will pay: quota with lack of capital (only interests, the most common), special reduced rate, or full normal fee. Always ask what happens if you run out of time without selling: some bridge mortgages escalate the fee significantly, and that is the scenario that must be calculated before signing.
How much does it cost
In addition to the interests (something above a standard mortgage), considers appraisal of the two homes, opening commission if there is one and the costs of the subsequent partial cancellation. It is the price of the peace of mind of buying without having sold: compensates when the new house is a real opportunity and your current home is objectively salable within the term.
The real risk: overvalue your current home
He 90% of the problems with bridging mortgages arise from the same place: believe that the current house is worth more than what the market pays and exhaust the deadline by asking for an unrealistic price. The bridge does not give infinite time. Before signing it, you need to know the real sales value—not that of the portals—and a serious sales plan: preparation, photos, diffusion and price defendable from the first week. That is the difference between a bridge 8 months and one that turns into agony.
Alternatives if the bridge does not fit
Sell first and agree with your buyer on a flexible delivery (or a temporary rental), reserve new construction —whose long deadlines often make the bridge unnecessary, as we tell in our guide sell to buy new construction— or negotiate longer deposits on the purchase.
At Mayrasa we help you with the piece that holds the entire bridge: a real valuation of your home and one sale executed on time. With real value and a serious calendar, the bridge decision is made alone.
