Bridge credit is a bridge loan that allows you to buy a new property without selling the current property.
It is a specific real estate loan, responding to a particular need and having special conditions.
A bridge loan allows a homeowner to buy a new home or a new apartment while already having a property, this allows to take possession of the new home and have a period to resell the first property. Its duration can vary between 1 and 2 years and its amount will depend on the value of the property to be sold and the one that is bought, it is generally estimated that the amount of the bridge loan can represent between 50% and 70% of the value. good to sell.
The amount of the bridge loan will therefore be determined according to several estimates of the value of the current property, the interest being for the bank to obtain the most accurate amount possible in order to grant the bridge loan. As such, each bank has its own criteria and requirements. If the loan relay can allow a change of housing quickly and without too much logistical constraints (moving, temporary lease …), the non-sale of the first habitat will still result in the repayment of the bridge loan following the conditions set in the contract.
Repayment loan, repayment and sale of real estate
The bridge loan is a mortgage specially designed to meet a financing need in connection with the purchase of a new property, so we must take the measure of this loan and ensure to be informed of all terms of repayment. It is strongly advised before taking any action to take the temperature on the real estate market, to have the value of his house or apartment evaluated to maximize the chances of resales. It is important to be able to sell the property during the transition period agreed in the bridge loan agreement.
In case of non-sale of the property, the bank will require the repayment of the bridge credit. The non-repayment of the debt can lead to a placement in recovery situation and then a registration in the file of the incidents of reimbursement of loans to individuals (FICP). A situation that inevitably leads to the filing of an over-indebtedness file with the Bank of France. Simply, the bank can propose solutions according to its customers, it can prolong the credit if for example a fall in price can make it possible to sell quickly the good or to turn it into a conventional mortgage loan if the first property is put in hiring.
The notion of franchise in the loan relay
The repayment of the bridge loan can take two orientations, we speak of partial franchise and total franchise. Either the borrower can repay the interest, the borrower insurance and the borrowed capital at the end of the term of the contract (partial deductible), or he can only repay the borrower insurance during the term of the bridge loan and the capital borrowed with the interest at the end (total deductible).