Have you found the house of your dreams, but do you have too little money because your current home has not been sold yet? One solution for this is the bridge credit. But how does it work exactly?
With bridge credit, you can literally fill the gap between buying your new home and selling your old home. You estimate the house you want to sell and get the estimated amount as a loan. You can not get more than what your house is worth. In addition, you do not have to repay the amount monthly, as with a regular loan. You only pay interest on the amount included. However, these interests are usually higher than with a mortgage. When your house is sold, you will have to repay the total amount of the loan to the bank. Usually, the duration varies between 12, 24 and 36 months.
Bridge credit: costs and risks
If you want to contract a bridge loan, you will have to take into account the additional costs. There is, for example, the booking fees and booking fees. This can go up to 800 euros. There is no notary fees as no notary is necessary.
In addition, you run the risk that your home will not be sold on time and you will not be able to repay the loan. In this situation, you have two options: you request an extension with new conditions or you have all converted to a mortgage with adjusted interest rates.
Bridge credit: advantages and disadvantages
A bridge credit has many advantages and disadvantages.
The advantages of a bridge credit:
- Flexibility: you can wait to sell your house until you have a nice offer.
- You only have to pay interest on a regular basis.
- No notary is necessary.
- You do not have to take out a second mortgage.
- The interest is tax deductible.
The disadvantages of a bridge credit:
- Rates can vary considerably from one bank to another. So you have to compare them well before taking out a bridging loan.
- You will have to sell your old house in the agreed period.
- The interest rate is higher than with a mortgage.
- There is no tax deduction for the housing premium.
Almost all banks offer bridge credit. But compare well, do simulations online and do not be afraid to ask for enough information / conditions. This is a high amount of money and a wise man is worth two.