First Rate Mortgages Home Loans NZ
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Bridging Finance, gives you time to plan, sell or just to take a breath!

When Bridging Finance has a definite repayment date it can be referred to as "closed bridging" or, if there is no set time frame for repayment "open bridging". A Non Bank Lender will often assist with open bridging, providing you have good equity in your current property. Closed bridging finance has much more appeal for a Bank lender, as they can advance the bridging facility and have a definite date when the finance will be repaid, therefore much less risk.

Typically your existing first mortgage will be refinanced and increased by an agreed amount against equity you have in your existing property, plus possibly a property that you are buying. The bridging finance will often then be at a level which requires all, or part of the interest costs, to be included in the mortgage, which is known as "capitalised interest".

The period of time required will be determined by the events that need to occur. Do you need time for a Home to be marketed, a construction project to be completed, or a property has been sold, and you are awaiting settlement proceeds. In some cases you may be under pressure to sell by your Bank, who are threatening a mortgagee sale, and you require more time to allow some improvements to be completed to add value to your home, perhaps consolidate some debts, or you wish to sell in an orderly manner, without the Bank being in control of the sale. Bridging finance can put the sale process back in your control so that you are not forced by the bank to sell at a significant discount, eroding your precious equity! In times like these, especially with missed mortgage reoayments and possibly bad credit issues, you may need the urgent help of a Non Bank Lender!

One of our most frequent requests is that clients have found their "dream home" that they must buy right now and they have not even listed their existing property with a Real Estate Agent yet! This is a time for urgent bridging finance to secure the new home.In the current market where many properties are auctioned you do not have time to buy subject to selling your own home so you may have to take the plunge and buy using bridging finance.

A word of caution, always try and arrange pre approved finance prior to bidding at an auction and make sure you have spoken to your solicitor, completed any building checks and often you will need to have arranged a registered valuation report.

Alternatively the bridging finance could be required for more of a business nature, whilst you await titles to be issued for a subdivision, or you have completed a spec home and are awaiting a sale, or you simply need temporary working capital to be injected into your business.

Whilst the global credit crisis has signifcantly reduced the number of lenders who can assist with bridging finance and the Banks are super cautious as the economy slowly starts to recover, we are fortunate to still have access to a number of funders who can assist you with bridging finance.

Amounts available are typically up to $2,000,000. with terms of 6 - 24 months and interest rates starting from 8.5% pa. Final pricing, including fees, will be based on the risk preceived by the lender, due diligence and the availability of funds.

In some cases, where significant amounts of up to say $10,000,000. are required we also have access to Private Funders who can assist with venture capital.

So if you are looking at bridging the financial gap from point A to point B, call us now for help with bridging finance!

Contact us for more information
info@firstratemortgages.co.nz
or Freephone 0800 178 726

First Rate Mortgages - "Financial Fresh Air"