Buy Resale, Bridging Loan For Owners
June 19, 2019
The Resale Purchase Loan is a fixed rate loan used for resale purchase transactions, which finances a new acquisition before the resale of real estate. This type of credit avoids the bridge loan and gives a period of 2 years to resell the property.
From the outset, there is a planned programmed repayment of a maximum of 80% (in general) of the price of the property to be sold (amount determined after an appraisal) to be made at most 24 months after the departure of the credit (resale period ).
The benefits of the buy resale loan
- This credit allows you to buy right away without waiting to sell the old property.
- The Resale Purchase Loan allows you to benefit from a single loan, with a single offer and a fixed monthly payment for the entire duration of the loan.
- The forecast repayment is exempt from prepayment indemnities.
- The Purchase Buy Resale allows to have a personalized support of the subscription of the loan until the sale of your good.
Can you buy without selling?
Today, 40% of acquirers simultaneously conduct a purchase and resale transaction, and in 25% of cases, they use a bridge loan. However, certain institutions no longer accept files with bridging loan or encourage people to sell before buying a new property, this to avoid the excesses of the bridge loan.
Banks tend to downgrade the valuation of assets. Their concerns about the evolution of the residential market push them to reduce the amount of the bridge loan granted compared to the amount of expertise which often prevents the borrowers to invest again (the banks take, in general, 70% of the value of the property for sale).
The LBS solution for the resale purchase loan
LBS’s Buy-Sell Loan is a one-time loan that allows borrowers to finance, with a single loan, a change of residence. It combines a bridging component that will be repaid early through the resale of the property and a long-term portion that covers the need for additional financing.
The client is 2 years old to sell his property in the best possible conditions. Once the sale is made the customer has the opportunity to keep up to 20% of the amount of the sale or reinject the entire sale in its loan which allows it to either reduce the duration or the monthly payment.
Tip LBS: In this type of product, the customer has every interest in selling a little cheaper, but faster, to achieve a significant saving on the cost of credit.