Next Home Buyer Loans and Bridging Finance
Your next home, arranged around the sale of your current one
Whether you are moving up, moving on, or buying before you sell, understanding the fundamentals of residential lending can help you make an informed decision.
Why Oakwood / Role of a Broker
As a broker, we provide guidance and support tailored to your situation, helping to streamline the lending process. Our services include:
Market Knowledge: We offer insights into the latest loan products from a range of lenders, so you are aware of the options available across our lender panel.
Personalised Service: By understanding your specific needs and financial capacity, we can identify loan solutions that align with your goals.
Application Process: We assist in preparing and lodging your loan application, ensuring all necessary documentation is in order and that the lender’s requirements are met.
Communication: We act as the point of contact between you and lenders, managing negotiations and correspondence to streamline the approval process.
Ongoing Support: From pre-approval to settlement, we provide continuous assistance, answering questions and offering guidance throughout your finance journey.
If you’re ready to take the next step, please reach out to our team today.
How a referral works
- Introduction. With your client’s agreement, you email or call us with their details and what they want to do. We acknowledge it and confirm who will look after them.
- First conversation. We speak with your client to understand their position and objectives, then let you know we have done so.
- Options and application. We compare suitable options across more than 70 lending partners, present them to your client and, when they are ready, prepare and lodge the application.
- Lender assessment and settlement. The lender assesses the application and makes the decision. We keep you and your client informed through to settlement.
Communication at agreed points
Before we begin, we agree the milestones you want to hear about, and your client knows we will keep you informed. Common choices are first contact, options presented, application lodged, lender decision and settlement.
Protecting your client relationship
Your client remains your client. We do not cross-sell, we keep to the finance your client has asked us to arrange, and you stay their trusted adviser. Any referral arrangement between us is disclosed to your client as the law requires.
What we arrange
Residential home and investment lending, commercial finance and commercial property, development and construction funding, asset and equipment finance, medical and specialised lending, SMSF lending, and finance for companies, trusts and other entity structures.
Working with accountants and lawyers
Where structure, tax position or legal arrangements bear on the finance, we work with the client’s accountant and lawyer from the outset, so the facility and the borrowing entity reflect the advice already given. We do not give tax or legal advice.
Start a conversation
To discuss a referral partnership, or to introduce a client now, contact us and we will arrange a time to talk. You can also read about Oakwood and meet the team your clients would work with.
Buy first, or sell first?
The second home is harder than the first, and it is almost never the loan that makes it hard. It is the timing. You are a buyer and a seller at once, and the two transactions rarely want to happen on the same day.
The two paths, priced
Sell first. You know exactly what you have to spend, you carry no double mortgage, and your offer is clean. The cost is that you may be renting or moving twice, and in a rising market the place you want may move further away while you wait.
Buy first. You take the right house when it appears. The cost is exposure: you carry both properties until yours sells, and if it sells for less than you hoped, the shortfall is yours. Lenders assess you very differently when you hold two.
We price both before you list or bid, using a deliberately conservative sale figure rather than the top of the agent’s range. If the plan only works at the optimistic number, that is not a plan.
Bridging finance, without the sales pitch
Bridging funds the new purchase before the old one settles. You carry a combined ‘peak debt’ until the sale, which then reduces it to the ‘end debt’ you keep. Terms vary by lender and are usually short.
Two things matter more than the rate. Interest normally capitalises onto the loan rather than being paid monthly, so the balance grows while you hold both. And some lenders assess you on the end debt rather than the peak, which is why bridging may be assessable for someone who could not service both loans conventionally, subject to the lender’s policy. That is a feature, but it means the whole structure depends on the sale actually happening. We stress-test the sale price downward before recommending it.
Do not start again by accident
Some lenders will let you ‘port’ your existing loan to the new property. Whether that keeps your rate or avoids break costs on a fixed term depends on the lender and your loan terms. It needs the settlements to be simultaneous or close to it, and not every lender offers it. If you are fixed, get the break cost in writing before you commit to anything. Occasionally it is large enough to change which house you buy.
An illustrative worked example
An illustrative example of how a file like this can be approached. It is not a client outcome, and no result is implied. This is general information only, not credit assistance, a quote or a recommendation. Every structure depends on individual circumstances, lender credit policy and approval. Oakwood arranges credit through its lending partners; all lending is subject to lender assessment and approval.
Worked example · Upgrading with a young family
Buying before selling, without betting the house on the sale price
Structure to consider: bridging finance assessed on the end debt
The situation. A couple finds the house they want before they are ready to list their own. Selling first would mean renting and moving twice with a young family.
The complication. On paper they may not be able to service both mortgages, which can rule out a conventional second loan. Their existing loan is partly fixed, and the agent’s appraisal on their home covers a wide range between the bottom and the top.
What we would look at. A bridging facility assessed on the end debt, with the peak debt sized off the bottom of the appraisal range rather than the middle. The break cost on the fixed portion would be confirmed in writing before they commit, so it is known rather than guessed. Where the lender allows it, interest can capitalise over the bridging period, so there is no second repayment to find while both properties are held.
What the example shows. Sizing the plan off the bottom of the range is meant to keep it workable if the sale comes in low, which is the reason for building it that way. The whole structure still depends on the sale happening, and whether a lender will provide bridging finance, and on what terms, is for the lender to assess.