Relay loan: Online comparison and Free Quotes
What is a bridge loan?
The bridge loan is a type of mortgage. It is intended for second-time buyers, that is to say owners who already have a home but want to sell it to buy another. It is difficult to buy real estate if the current home is not sold yet. This is precisely what the bridging loan is used for: it is a solution of Alcestement to give the buyers the means to acquire a property without waiting to have sold the previous one .
What are the terms of the bridge loan?
Bridge loans are granted by banks or credit institutions for short periods of 1 to 2 years, usually with a single renewal option.
The amount of the bridge loan is generally between 50% and 80% of the price of the property. Lending institutions take the precaution of estimating the property in question by an expert before proposing an amount. The amount obtained is not necessarily what you ask for. As far as interest rates are concerned, you should know that they are higher than in the context of a classic home loan.
If the bank or credit institution has involved an expert to estimate the value of your property, the costs of this expertise may be borne by the lending institution or your responsibility.
How is the refund?
Repayment of a bridge loan can be done in two ways:
- Either you only repay the interest initially and you repay the capital once the sale of your property. This is called partial deductible.
- Either you pay interest and principal together only when you sell your property. This is called total franchise.
The total deductible is more expensive than the partial deductible but less burdensome to assume during the contract.
The different types of loan relay
There are different types of bridge loan: back-to-back relay loan, dry relay loan and integrated bridge loan.
The relay loan backed
The back-to-back lending (also called Relay Relative Lending ) is linked to a classic depreciable real estate loan. This is the most common form of relay on the market. As long as the sale of the old property has not taken place, you pay both the interest of your bridge loan and the monthly payments of your mortgage. On sale, you repay your bridge loan and continue to pay monthly mortgage payments.
The dry relay loan
The dry relay loan is granted without associated real estate credit. It is used when the proceeds from the sale of the recipient’s old home are sufficient to pay for the entire new purchase.
The integrated relay loan
With the integrated loan , you buy a single global loan, which includes the amount of the bridge loan. This credit allows the subscriber to make a partial prepayment of the loan upon the sale of his property.
The benefits of the bridge loan
Subscription to a bridge loan is an excellent alternative when dealing with various work or family situations. In case of immediate transfer, this loan system makes it possible to acquire property quickly without waiting to sell one’s home .
Similarly, when the family is growing and the housing is too small, it is often urgent to move to live in a larger dwelling. This solution prevents families from renting during the transaction period, which can represent a cost (moving expenses, security deposit, rents, etc.). Finally, the loan relay can not sell off his home for sale but also not to miss a real estate crush.
And if your property does not sell?
The bridge loan is granted for a period of 12 to 24 months, after which time you are expected to fully repay the principal amount due. How to do if your real estate is still not sold after this time ? Several solutions are possible:
- Negotiate with the bank, for example to extend the bridge loan or transfer it to a conventional loan;
- Review the selling price of your property down or do renovation work.
However, after 2 years, the bank or credit institution is entitled to ask you for a full repayment of the bridge loan, even if you have failed to sell your property.
Think about the relay loan simulation
Like any home loan, a bridge loan is a major commitment. It is therefore legitimate to look for the cheapest bridge loan, with the most interesting interest rate. To achieve this, the ideal is to use an online comparator like Alceste.fr. All you have to do is fill in information about your project:
- The type of property to buy (new, old, apartment, house, second home …);
- The amount of accommodation you wish to acquire;
- The amount of your property for sale;
- Your capital remaining due for your first property;
- Your possible personal contribution.
In just a few minutes, you access a quote page with offers of credit relays according to your profile and your situation. You just have to select the most competitive!