Bridging loans for downsizing homes during retirement
Retired homeowners often make the decision to downsize their homes in later life. It could simply be that you no longer need such a large property, or that maintaining your current home and garden has become problematic.
Elsewhere, downsizing can be just the thing to tap into the equity you have tied up in your home, by scaling down to something smaller with a lower market value.
But what homeowners looking to downsize often find is that the subsequent home purchase process is just as complex and time-consuming as buying a home in the first place. Downsizing typically means becoming part of a property chain in the normal way, wherein every buyer and seller is reliant on every other buyer and seller.
This can be particularly frustrating when you already have more than enough equity tied up in your current home to buy a smaller property. It is also a scenario where bridging finance can offer a welcome lifeline, enabling homeowners to opt out of the conventional property chain entirely.
The benefits of using a bridge loan to buy a retirement property
Bridging finance can be a particularly useful facility for downsizing during retirement for the following reasons:
- Bridging finance gives you immediate cash buyer status
With bridging finance, it is possible to receive a loan offer in principle within 24 hours, and gain access to the funds required within a few working days. This provides the borrower with cash buyer status, enabling them to escape the typical property chain scenario with the spending power of a cash buyer.
- Bridging finance is flexible and accessible
As bridging loans are designed to be repaid as quickly as possible – usually within a few months – they are open to applicants of all ages, irrespective of income level or credit history. The facility is secured against the property of the applicant in the same way as a conventional mortgage, but is repaid shortly afterwards in the form of a single lump-sum payment.
- Bridging finance can fund urgent relocation
The speed and simplicity of bridging finance makes it ideal for covering the costs of urgent moves, where time is a factor. Should your circumstances change and you suddenly find yourself unable to live comfortably or confidently in your current home, a bridging loan could make it possible for you to buy a new home in a matter of days.
- Bridging finance can help you get the best possible ROI
A bridging loan can eliminate the need to rush through the sale of your current home, in order to buy your next home. Repayable a few months after the facility is taken out, bridging finance provides the welcome breathing room needed to sell your current home for the best possible price. It’s the most valuable asset you will ever own, so it simply makes sense to sell it for its full market value.