Security in the home you are selling

What is a bridge loan or intermediate financing? You often need a bridge loan when you buy a new home before you have sold the old one. This is capital you have saved up in your home, but have not yet realized.

Many people choose to buy the dream home before they have been able to sell their current home, others may not be able to sell the home as easily as they had thought. Thus, you are left with two homes for a short period. Then we can help you with a so-called bridge loan (intermediate financing), which is in addition to any loan on existing housing. The bridge loan is installment-free, so that the financial burden does not become too heavy. The most common is that you get a bridge loan over 6 months, where you only pay interest on this loan. If you have not been able to sell you current property within 6 months, the bridge loan can be extended.

When can you use a bridge loan?

• When you want to buy a new home before you sell the one you live in now
• When you have sold a home and are going to buy a new home, but have not yet received a settlement for the home sold. Some people choose to have the handover of an old home well in advance so that they have plenty of time to find a new home.

How long can you own two homes?

The bridge loan usually has a term of up to six months with the possibility of a few months extension. This means that you can own two homes for up to approx. half a year. When you or the broker receive the settlement for the home you have sold, the bridge loan is paid back to the bank. On the new ordinary mortgage, the bank gets security in the new home.

Having to sit with two homes and two mortgages sounds basically quite expensive. If, for example, the new home is bought for four million, and the old one has a loan of three million, you are in debt of seven million in this phase. But the expenses do not have to be as high as it may first sound like, as you only pay interest for the bridge loan. If the loan on an existing home has security within 60%, this loan can also be made without installments during the sale period.

The cost of the bridge loan will therefore not overturn the load, even if you have a high loan during this period. It is what you ultimately get to sell your home for, which has the most to say for the economy in the future.

How much can you borrow?

Valuation from a real estate broker or the actual sales price of your current home is used as a basis for calculating how much you can get in a bridge loan, then existing mortgages and brokerage costs are deducted. Total debt and security must then be below 85% of the total value of both homes.

If you have already sold your home, but not handed it over to the new owner before you take over your new home, the bank can calculate up to 100% of the value of the home/sales price. This means that you can borrow 100% of your restricted equity, minus the current loan and brokerage costs.

We help you with the whole process

If you already own a home, we can help you estimate the value of this, and assist with tips on a skilled real estate agent in your area. For the fastest possible case processing, attach the latest tax return, recent pay slip, valuation, FINN code and any other relevant documentation.

We collaborate with several banks and credit institutions, and therefore have a lot of knowledge about the solutions and products that exist. Together we review your financial situation and find an optimal solution for you.