The bridge loan

The time it takes currently sold in Spain in a home ownership has grown significantly. According to some industry experts, a house that is put on sale today require between 4 and 6 months to find a buyer.

This lengthening of the time makes it difficult for people who want to acquire a property and have not yet sold their old house.

The bridge loan solves this problem. It is a credit to finance the purchase of a newly built home before selling the old one, directed especially to those vendors who do not have enough time to sell your property in the best condition and require funding to cover certain costs that derived from the purchase of a home off plan, as the reserve or the signing of the deed.

This type of loan, then, emerges as a possible solution to carry out two operations, buying and selling, at a time.

The client is seeking a personal loan with a fixed term, which ends at the time of the establishment of the mortgage on the house level.

The client must agree to cancel the loan within a maximum range of typically 12 months, with the money obtained from selling your old home.

The person concerned also have to take into account a range of interests, higher than those for a traditional mortgage, around 6% and 8%, plus the cost of setting up, management and termination.

The reason for such high interest is related to the nature of credit and uncertainty, since the formalization of the new mortgage depends on the sale of the old house.

La Caixa, for example, is one of the banks that currently offer this product. This is the Mortgage House x Casa. "With this mortgage you can now buy a new house without having to sell the current rush, because you fund up to 80% of the value of the new house and also provide you with up to 80% of the value of your present home," can be read on the website of La Caixa.

Unlike other loans, bridging loan allows a more open negotiations, from the capital up to the nominal interest rate, the differential or the maximum period and the gap.

With regard to documentation to be submitted, the bank usually ask for a photocopy of the DNI, the latest income, payroll, an employment contract, the contract of sale and a simple note of the Land Registry found that the housing This comes as security deed on behalf of the person concerned.