It sounds logical, really: if you want to buy a new home, sell your existing property first and buy the new one with the proceeds. Unfortunately, in practice, moving home is often more complicated than that. In Switzerland, there are no standardised solutions for bridging loans. This article offers a handy guide.
Sometimes situations arise where you need to act fast – for instance, when a limited offer comes up, there’s a baby on the way, or age-friendly living suddenly becomes a priority. In such cases, you’ll need to be able to sell your existing house or flat as quickly as possible, so you can buy the new property at the same time.
Should you sell your old house or flat before you buy a new home? The budget required for this transaction is not always so readily available. Ideally, of course, you can use the funds obtained from selling your existing property.
More questions to ask: Can you rent somewhere temporarily in the meantime? Or could you sell some assets or get an advance on your inheritance to raise the necessary funds? Usually, however, these funds don’t become available quickly – it can take months until they are fully transferred.
If you don’t have the funds to buy the new property, you will have to sell your old home first. But this can take time. Bridging loans offer a good solution in this case. These are loans or other credit facilities that are taken out until the tied-up capital becomes available. Bridging loans are a practical solution to quickly get your purchase of a house or flat over the line.
If you struggle to swiftly find a buyer for your current house or flat, you can increase the mortgage on it to 90%. By raising your mortgage from 70% to 90%, this will free up 20% as capital for the new property. The mortgage increase depends on the market value of your current property. However, you will be bound by certain restrictions if you choose this option – for instance, the house or flat may need to be sold within a year. When the property is eventually sold, you can use the proceeds to cover the previous mortgage and bridging loan.
Even if the bridging loan has been approved by your financing partner and the money is available for the new investment, you should forge ahead with your efforts to sell your current property or acquire the necessary funds where possible. As a short-term solution, bridging loans usually have rather high interest rates. That’s why rapid repayment is recommended.
If you’re looking for a bridging loan, Engel & Völkers can help you make sure everything stays under control. With our valuable experience, we can show you the best approach to buying your dream property. When it comes to bridging loans, we deal with the bank, secure the best lending terms and advise you on all mortgage matters. With the profits from the sale of your previous house or flat, you can repay your bridging loan swiftly.
Contact us now and take advantage of our one-stop shop service that makes moving home hassle-free. We look forward to hearing from you! Simply give us a call or send us an email.
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