Bridging finance and refinance

Discussion in 'Loans & Mortgage Brokers' started by Illusivedreams, 13th Feb, 2020.

Join Australia's most dynamic and respected property investment community
  1. Illusivedreams

    Illusivedreams Well-Known Member

    Joined:
    3rd Oct, 2017
    Posts:
    1,806
    Location:
    Sydney
    Hello guys

    If we take bridging loan now .Which has been approved
    Can one refinance within the 12 months period.,? If the income stacks up.
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,608
    Location:
    Perth WA
    Refi the bridge?

    Possibly, although if the lender finds the house has been on the market more than 6 months already, they'd probably raise some eyebrows.

    I've never tried to do this, so I'm just thinking out loud.
     
  3. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,921
    Location:
    Adelaide, SA
    I believe OP talking about getting bridging loan 12 months because can't show servicing.
    Then within the 12months servicing improved (income stacks up)
    Then refinancing to a traditional loan (no bridging clause)

    Yes absolutely can be done.
     
    Lindsay_W, Jess Peletier and Terry_w like this.
  4. Illusivedreams

    Illusivedreams Well-Known Member

    Joined:
    3rd Oct, 2017
    Posts:
    1,806
    Location:
    Sydney
    Exactly spot on.

    That was the question.
     
    Brady and Lindsay_W like this.
  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,608
    Location:
    Perth WA
    Oh right! Yes for sure, that can be done.
     
    Brady likes this.
  6. Illusivedreams

    Illusivedreams Well-Known Member

    Joined:
    3rd Oct, 2017
    Posts:
    1,806
    Location:
    Sydney
    Thank you.

    So if the current financials are supporting the loan amount we can refinance the bridging loan.

    Can bridging loans be extended? the one offered was a 12 months loan. Or its a hard and fast 12 months.
     
  7. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,921
    Location:
    Adelaide, SA
    Wait wait, now looks like you're asking for bridging refinance to another bridging. NO

    Bridging loan (can't show servicing on full loan) can be refinanced by normal loan (but only if you can now show the income to support)

    Don't be looking at getting bridging expecting can be refinanced to another bank with bridging.
    Or don't expect the bank to extend.
    In saying that I've had a few bridging loans extended, but also had a couple declined to be extended.
    I would only be relying on 12 months hard and fast
     
    Terry_w likes this.
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    24,282
    Location:
    Australia wide
    If you go over the time period it is a breach of contract, but what are they going to do practically speaking - give you an extension rather than sell you up.
     
  9. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    892
    Location:
    QLD
    With the extensions that were declined, what happened next?
     
  10. Morgs

    Morgs Well-Known Member Business Member

    Joined:
    7th Dec, 2017
    Posts:
    692
    Location:
    Sydney NSW
    Can't speak for Brady- but I've seen this where it becomes a default and gets sent to the lender's collections team. Not good things.
     
    Brady and Terry_w like this.
  11. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    892
    Location:
    QLD
    Dang - not good - as if I needed another reason not to do 'em, they fit a need I guess.
     
  12. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,176
    Location:
    Melbourne, Nationwide
    I wrote a bridging loan with ANZ early last year. The client was required to write a letter that stated that they would, "Meet the market", if the property hadn't been sold within 6 months.

    They did have to meet those conditions a few month later and they sold the property for less than the original valuation. Overall they came out of it okay, but they did get a number of unpleasant calls and letters from the bank.
     
    Lindsay_W likes this.
  13. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,921
    Location:
    Adelaide, SA
    Pretty much lots of pressure, had to show that was actually marketing the property

    In 1 case client hadn't even put on the market as wanted to renovate, completely against all original discussion.
    In the end he ended up selling the new property and went back to the old to complete renovations.
    Costly exercise.

    Other cases of approval of extension was with evidence of lowered asking price, switching of real estate agent, pending auction.
     
    Lindsay_W likes this.
  14. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    5,718
    Location:
    Gold Coast
    Sage advice

    ta
    rolf
     
    Brady likes this.