Because it can be very difficult to match the purchase of a new home to the sale of the current house, the bridge loan has been created.
With a bridging loan you can borrow the surplus value of your current home to partly finance the new house.
Bridging loan possible?
In order to be eligible for bridging financing, there must be clear evidence of surplus value in your old home.
If the current house has already been sold, but has not yet passed through the notary, the maximum loan will be calculated as follows:
- Selling value minus mortgage debt is equal to the bridging loan.
If the house has not yet been sold, the amount of the loan is usually calculated as follows:
- Execution value minus mortgage debt = bridging loan.
Take over-value to purchase new home
Usually it is not inconceivable that you have a certain amount left from the sale of your current home. However, it will be a problem if you can not properly match your current home to the purchase of a new home. The period between the purchase and sale can be bridged with a loan; the bridging loan.
The bridging loan is an additional credit . With this additional loan you can still complete the purchase of that new home. A bridging loan is a temporary loan that can be repaid immediately after the surplus value has been released from the old house.
(tax deductible) interest bridging loan
As interest must be paid for each loan, this compensation must also be paid when a temporary loan is taken out. The advantage, however, is that the interest is tax deductible in box 1 as home acquisition debt. You must be able to demonstrate that you have taken out the bridging loan to finance a home.
Duration of a bridging loan
The maturities of bridging loans are often very limited because it is a loan that only has to cover a shorter period. The maximum duration can vary considerably for each lender. Usually the term of a bridging loan is a maximum of one, two or three years.
Benefits of closing bridging loan
- In order to release your surplus value, you no longer need to sell your current home first. With a bridging loan you can transfer the surplus value to the purchase of a new home;
- With this temporary loan you can bear the costs of both houses for a certain period of time;
- A tax-deductible interest.