Home Loan Short Term

Frequently Asked Questions (FAQ)

How do lenders determine eligibility for short term home loans?

Looking up ‘home loan short term’ and wondering about your eligibility?

Lenders in Australia, like Bridgit, determine eligibility for these short term home loans through a combination of homeowner status, financial assessment, and property valuation. These loans could be used by homeowners who are either downsizing or upsizing their living spaces.

For downsizers, often retirees, the focus is on their asset-rich status due to long-term property ownership. Upsizers, typically middle-aged with growing families, are assessed based on the value growth of their existing property.

The financial assessment includes reviewing income sources, whether from employment, retirement funds, or self-employment. Bridgit caters to a diverse range of income earners, including retirees and the self-employed, with specific documentation requirements for each category.

The loan amount and terms are generally influenced by the property’s valuation and location. Key to Bridgit’s approach is the loan-to-value ratio (LVR), which determines the loan amount as a percentage of the property’s value.

Is mortgage insurance required for short term home loans?

The requirement for mortgage insurance on home loan short term schemes varies. If the down payment is less than 20% of the home’s value, mortgage insurance might be necessary. However, due to the shorter duration and lower interest rates associated with short term lending, the need for mortgage insurance is often less common compared to traditional longer-term mortgages.

The decision to require mortgage insurance is contingent upon the lender’s policies and the specific terms of the loan. For short term home loans like our bridging loans at Bridgit, the requirement for mortgage insurance is not typically a primary concern.

Mortgage insurance is generally associated with long-term home loans, especially when the borrower has a low deposit, resulting in a high LVR. This insurance protects the lender if the borrower fails to repay the loan.

Bridging loans, however, operate differently. They are designed to help homeowners leverage the equity in their existing property to purchase a new one before selling the old one. The focus here is more on the equity available in the current property and the homeowner’s ability to repay the loan within a short timeframe, usually up to six months.

Given this framework, mortgage insurance is not commonly a requirement for short term home loans. However, borrowers should always verify specific loan requirements directly with the lender or seek advice from a financial advisor to understand all the terms and conditions, including any insurance requirements, associated with their loan.

Can you refinance a short term home loan?

You can refinance short term property loans. Refinancing in this context means replacing your existing short term loan or mortgage with a new loan, often with different terms or from a different lender. This is particularly relevant for bridging loans, which are designed to be short term solutions for easy home financing.

For example, with Bridgit’s bridging loans, homeowners can buy a new home before selling their existing one. Once the original property is sold, the proceeds are used to pay off the bridging loan.

If there’s a remaining balance from their short term mortgage after the sale, homeowners can refinance this amount with a traditional lender. This means they can transfer the remaining debt to a standard home loan, which usually has a longer term.

Home financing made straightforward with Bridgit

By focusing on the actual needs and circumstances of Australian homeowners, Bridgit has redefined what it means to offer financing in property transactions. Our customer-centric approach, combined with innovative financial solutions, solidified our position as one of Australia’s trusted short term private lenders.

Bridgit utilises a tech-first approach, providing fast decisions for a short term property loan. The online application process is convenient and designed to be quick and user-friendly.

Bridgit’s use of technology streamlines the lending process, allowing for more rapid and accurate processing of applications. This tech-driven approach helps reduce the time and effort required for manual processing, making the loan application experience smoother for borrowers.

Through its innovative approaches and dedication to customer empowerment, Bridgit continues to make a difference in the Australian property market. If you are ready to experience how Bridgit makes homeownership accessible and aligned with modern lifestyles, contact us and find out more.