Anyone who buys a new house before the old one is sold and does not have sufficient own resources needs a bridging loan singapore. In order to qualify for a bridging loan, you must prove that you can bear the temporarily higher housing costs.
What is a bridging loan?
A bridging loan is a loan to bridge the period in which you bought a new house, but the old house has not yet been sold. The interest you pay on the bridging loan singapore is usually (but not always) slightly higher than the interest on a ‘normal’ mortgage. This interest is tax deductible.
Paid bridging loan
As soon as the old house has been sold, you will first deduct the bridging loan singapore with the possible surplus value . The lender will also demand that from you. Is there still surplus value after that? With a view to the additional loan scheme , it is advisable from a tax perspective to reduce the mortgage on your new home.
When do you get a bridging loan?
Usually you have 24 months to sell your house (permanently). A number of banks have less patience. Approximately one third of the lenders offer a bridging loan only if the old house has already been sold on paper and the term of the rescuing conditions has expired. The main resolutive condition is that the purchase of the old house will not take place if the buyer does not receive the financing. Only when the term of the rescission conditions has expired, the sale of the old house is definitive.
How much credit do you get?
Has the house been sold (on paper)? Then at most banks the bridging loan singapore is equal to the achieved sales price minus the residual debt minus the selling costs. Many banks set sales costs as standard at 3% of the sales price.
Has the house not yet been sold or have the resolutive conditions not yet expired? Then most banks maintain a safety margin of 10%. You will receive a maximum of 90% of the valued sales value minus the residual debt of the mortgage on the old house.
Do you not have this 10%? Then you can possibly co-finance this amount in the mortgage on the new home. As soon as the money from the sale of the old house has arrived, you deduct this amount. Then pay attention to the risk storage perhaps down.
Interest of bridging loan
Banks do not use a distinction according to risk class, mortgage form or fixed-rate period. There is just one rate for the bridging loan singapore. The interest on this interest-only loan is tax-deductible. It depends on the bank whether the interest for the term of the loan is fixed or not.