Mortgage change of house santander opinions
Did you know that if you want to buy a property you have the option to do it before the bank accepts the mortgage? In this post we talk about the bridge loan and the advantages and disadvantages of contracting it.
The bridge loan is a type of loan that can be used when there is an immediate need to obtain financing. It is of temporary character, which means that it is granted until the definitive loan is made official, always with the condition that the beneficiary assures a future income.
This type of loan can be requested for any reason, but the most common is to request it to obtain a new home without being forced to immediately sell the current one. For this reason, it is commonly referred to as a “bridge mortgage”.
Undoubtedly, the main advantage of applying for a bridge loan is that it allows the beneficiary to sell his home quietly, without rushing or being forced to undersell at a lower market price.
This is where the main disadvantage of this type of loan lies, since the borrower must repay the total amount of the loan, i.e. the principal plus interest. Obviously, this implies a much higher risk than in fixed, mixed or variable mortgages.
Banorte bridge loan
Are you thinking of buying a new home but you haven’t finished paying off your old one yet? The bridge mortgage is the option that banks offer so that you can buy a house while you sell the other one.
A bridge mortgage is a type of mortgage loan that makes it possible to buy a house while the previous property has not been sold. The bank usually provides facilities such as lower installments until the customer can make the sale of the house.
The bridge mortgage has a different operation than a fixed mortgage, a variable mortgage or a mixed mortgage, this is because the purpose changes significantly. The process is as follows:
The contracting of a bridge mortgage has some very definite requirements associated with it, mainly because of the very specific characteristics it possesses. These conditions must be taken into account before contracting it:
When we begin to consider the option of contracting a bridge mortgage, due to its particularity, we must consider that it implies some advantages and disadvantages that must be taken into account before going for it:
Santander bridge loan
The most appropriate situation would be to sell the house in which we currently live in order to be able to afford the payment of the new residence at a later date. However, as the sale period can now be too long, the bridging loan allows us to move into the new house while we put the old one up for sale.
The operation of the bridge loan is somewhat different from that of a conventional mortgage, since it is designed exclusively to be able to buy a new home while the old one is being sold. Let’s take a closer look at how these products work:
As is logical, for the bank to grant us one of these loans it is essential that we have a good profile: sufficient savings, high income, job stability, healthy credit history….
The great disadvantage of these products is that if we do not manage to sell the property within the established period of time, we will have a major problem, since the mortgage payments will increase as soon as the initial capital deficiency is over. In these cases, the monthly payments will include the debt contracted for the two properties: the one we have acquired and the one we have not yet sold.
Transitional or bridge loans
Determining a financial plan is one of the first steps to take in order to determine the financing needs for an investment project, or in other words, how much money we need to start up a business.
The operating costs of the business must be covered, i.e. the salaries of the employees, the rent of the premises where it will operate, the money to be paid to the insurance and the TSS, supplies, promotion, marketing, etc.
When a business starts operating it must have the amount equivalent to a determined amount of months to cover all the previously mentioned expenses. It is advisable to have at least 6 months of expenses.
Businesses imply investments in furniture, sometimes machinery, supplies, equipment, fitting out of the premises, etc. These investments must be equally contemplated at the time of making a business plan.
The bridge loans are characterized because the applicant requires it with immediacy and with this purpose contracts an agreement of provisional character until it is formalized with a definitive credit, putting as guarantee a future income to the debtor.