A bridging loan is not the same as a mortgage. To obtain bridging finance, applications go through a similar application process. The process has differences, such as evaluating the current homeowner’s property’s value and the value of the new property. 

Additionally, bridge loan applicants provide proof of income for the financing. Most homeowners who obtain a bridge successfully pay off their old mortgage, keep up with the repayments for their new mortgage and the financing. Lenders still take a conservative stance on bridge financing because it puts more financial stress on the client.

Proof of income helps a lender see that the client is in a position to successfully pay back the additional debt without too much pressure. The average monthly mortgage repayment in Australia ranges between $1,500 and $2,000. A homeowner trying to sell their current home and purchase a new one ends up with two mortgage repayments. The bridge loan fills the gap for a few months, which helps the homeowner. At the end of the bridge loan term, the financing must be paid back in full on top of the monthly mortgage repayments.

Several homeowners have gone through this process successfully. Brokers should know that their clients can obtain the loan if it’s the best solution. It helps a broker to set their client’s expectations. Ask them to prepare their income documents before applying so that the process runs smoothly and efficiently. 

Proof of Income for Bridging Loan Conclusion

Applicants do provide proof of income for a bridging loan. The client goes through an application process similar to the mortgage. If everything checks out, a loan specialist provides a welcome packet to the client. If it does not, Mortgage Street loan specialists have the tools to offer alternative solutions. To get started, give us a call today.