WeBridge. Experience The Difference

How to speed up the property sale process and get your money today.

Timing is key with real estate purchases and constraints like limited cash flow can be a deal breaker for hasty sellers. This means you might have to disappoint the Missus with news that you will not be able to move in to her dream house after all. That office space with the perfect location is now grabbed up by your fiercest competition, simply because you had to wait on the funds from the sale of your current property.

Whether you are new to the term property bridging finance, or you want to simply brush up on your facts before making a final decision, you’ve come to the right place. In this practical guide you will learn all about bridging finance to buy or sell a property.

WHAT IS PROPERTY BRIDGING FINANCE?                       

If you are buying a new property while you are selling your current one, you might be in need of bridging finance. The norm is to complete the sale of your current property before acquiring a new one, however, bridging finance allows for your equity to be available to buy a new property, or use as you want, before the funds from your current property sale is in your possession. Why not just apply for a mortgage then, isn’t a loan cheaper than bridging finance? Property bridging finance differs from a mortgage in that bridging finance is used for a few months whereas mortgages are usually taken out on 25-35 year terms. Funds from mortgages can take weeks or even months to be released and defeats the purpose if your goal was to obtain the new property in a hurry. With bridging finance your current monthly income is not used to determine your eligibility as with loans, since you are discounting a future income to a value today. Selling the holiday home to fund your kids’ education? No problem! Bridging finance gives you the freedom of using the money however you see fit. Retired with no fixed salary? No problem, bridging finance can provide you with the needed funds.

Bridging finance can offer your funds immediately and the advance is not secured against the equity of the property like loans, but it is rather an advance of the future proceeds from your property sale.

IS BRIDGING FINANCE A GOOD IDEA?

Whether bridging finance is for you is entirely up to you, your current financial position and your unique monthly income stream. Due to the complex nature of a property sale and the amount of paperwork, administration and variety of industry professionals it involves, the property transfer process can take up to three months. If you’re an enterprise owner or property developer and in the process of obtaining a commercial estate you can very well double the waiting time.

That is, off course, if everything is in place and Marelize from the realtor’s office didn’t accidentally spill her café mocha on the transfer documents that now have to be signed all over again! 

Here are a few real-world scenarios why property bridging finance is a good idea:

  • The deal you negotiated on the new property is time bound.
  • You have found your dream home, but it’s hot in the market right now and might be snatched up quicker than you can Google prices for moving vans.
  • You have spotted an excellent location for your business and want to get your hands on it before your pesky competition does.
  • The timeline of your moving from one location to the next might be reliant on factors other than the property sale like a new job in another city or even country and you have to complete the sale before you can start your new venture.
  • Whether you’re into grand property development or a small business owner, your enterprise’s success might be dependent on a completed property purchase.
  • The pandemic hit most businesses very hard and unless you’re in the medical supplies industry or the CEO of Netflix, your savings might leave little to the imagination. Selling a non-essential property like a holiday home can release funds needed elsewhere that is often needed sooner than what the property sale will take.
  • You are retired and the banks do not consider you as credit worthy since you do not earn a monthly salary.

HOW DOES PROPERTY BRIDGING FINANCE WORK?

There are a few ways of how to finance property in South Africa, talking about property purchases specifically, but bridging finance is not one of them… This is because property bridging finance is not a loan and there is no such product as a property bridging loan. Much like a property sale, bridging finance is a once off purchase transaction, so there are no monthly installments on property bridging finance and there is no interest on bridging finance money, only discounting fees. The bridging financiers will “buy your wait” so to speak, at a discounted price. At WeBridge, we explain it that you press your “Fast Forward” button to receive your sale proceeds sooner and naturally there is a cost involved to press the button.

IS BRIDGING FINANCE EXPENSIVE?

The real question is whether you can afford not to take property bridging finance? If your answer is yes, then don’t. If your answer is no, then bridging finance is not expensive compared to the risk it poses of waiting for the funds from your property sale to become available. How to calculate bridging finance amount for property purchase will depend on the bridging finance company used and the amount of your property sale.

HOW LONG DOES BRIDGING FINANCE FOR PROPERTY PURCHASE TAKE?

In this case, you are using the advance from the sale of your existing property to fund the purchase of the next property. The saying “time is money” is clichéd for a reason. To be able to make a decision whether to opt for bridging finance or not, you will need to know whether it will be worth your while. Can you get the money from bridging finance immediately? YES! If you’re using one of a few good bridging finance companies, your funds will be paid into your account and be available to you the very same day!

HOW TO QUALIFY FOR PROPERTY BRIDGING FINANCE?

It is very simple; once the buyer of your property has signed a legal binding contract of property purchase, you can apply and the property bridging money is available right away.

If you are in the predicament of waiting on the transfer of your property sale, we strongly suggest to not let the ‘wifey’ down by passing on her dream home and certainly do not let your competition get the upper hand by snatching up that prime office or retail space.

So get a move on, start your new chapter!

Contact us for your fast forward button to get your property sale money today!