• Whether a first-time buyer or self-employed, a RAMS home loan has flexible options to make the loan work better for you.

  • Bridging loan

    How to get that new property when the old one hasn’t sold

    • Ideal for: Upgraders, Downsizers

      In the real world of upgrading or downsizing, many of us often find that perfect ‘next’ home before we’re able to ‘offload’ our existing one. 

      The solution could be a RAMS Bridging loan. It’s generally an interest-only loan that ‘tides you over’ enabling the purchase of a new property while you wait to sell or receive proceeds from the sale of your existing property.

      FACT:  RAMS does not charge a higher interest rate for bridging finance.  

      How does a bridging loan work?

      The amount of equity in your existing property determines the extent of bridging finance available.  Interest on the new finance is calculated and  capitalised for up to 9 months1, although if you haven’t sold by then, a 3-month extension may be possible, subject to normal lending criteria. 

      You continue making repayments as normal on the original loan only, until that property is sold. 

      This means monthly repayments remain the same even though you appear to have two properties and two loans.

      NOTE: New purchase costs such as stamp duty and legal fees can be included in the bridging finance.

      Things to consider with bridging finance 

      • Maximum term of 12 months, with interest only capitalised repayments, converting to principal and interest repayments on the new loan
      • Maximum LVR is 85%2 (can include settlement, application and legal fees)
      • Available for vacant land purchases, but conditions do apply
      • Not available for construction loans, company or Stratum title purchases
      • Refinance of another lender’s loan is acceptable; normal RAMS lending criteria apply
      • No redraws on the bridging finance allowed during the bridging term.

      Footnotes:

      1.  If your property hasn’t sold, RAMS offers an extension of 3 months then the loan is reassessed again at 12 months.

      2 The maximum LVR includes settlement fees, application and legal fees.

    • Hypothetical scenario

      Mark and Maggie started to look at new homes to get a feel for the market. They were looking to downsize the family home and find a more compact town house or apartment closer to the city.

      And sure enough, they found their ideal property soon after the search began. To compound the issue, it was due to go to auction in 3 weeks.

      But they still hadn’t even talked to an agent about selling their current home. What to do?

      First off, Mark and Maggie talked to an agent who arranged a valuation, and gave them a broad idea of what their property might reach at auction.

      RAMS says …

      Mark and Maggie then met with a RAMS Home home Loan loan Specialist specialist to discuss what finance options could ‘tide them over’ should they be successful at auction.

      With a bridging loan Mark and Maggie could secure the new property (while still owning, but organising the sale of, their current home). 

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