A couple were ready to move into their next home, but there was one problem: they hadn’t yet sold their existing property.
They didn’t want to sell first and then find themselves under pressure to secure another home. They wanted the freedom to find the right property and make the move when the opportunity came up.
The traditional approach to moving house is straightforward enough: sell your existing home, then use the proceeds to buy your next one.
But that doesn’t always work for everyone.
For this couple, selling first would have meant finding somewhere to live while they searched for their next home, potentially making a temporary move and then being under pressure to secure a property.
They wanted to buy first, giving them the flexibility to find the right home without having to make the sale of their existing property happen first.
The challenge was making sure that was financially manageable.
Ironbark Group looked at the couple’s overall financial position and worked through whether bridging finance could make the timing of the two transactions work.
The key consideration wasn’t simply whether they could purchase the new property. It was whether they could comfortably manage the higher short-term repayments while they owned both properties.
We also needed a clear exit strategy. Once the existing property was sold, the proceeds would be used to reduce the outstanding debt and bring the couple back to their longer-term lending position.
By looking at the complete picture rather than treating the purchase and sale as two separate transactions, we were able to structure a bridging finance option that gave the couple the flexibility they were looking for.
The couple were able to secure their new owner-occupied home without having to sell their existing property first.
Instead of being forced to sell and then search under time pressure, they had the flexibility to buy first and sell afterwards.
The bridging arrangement provided a short-term solution that connected the two transactions, with a clear plan for the existing property sale to provide the exit from the temporary higher debt position.
Buying before selling isn’t the right approach for everyone, but it doesn’t have to be an either/or decision.
Where a client’s financial position allows it, bridging finance can provide another option, giving them the flexibility to secure their next home first while they work through the sale of their existing property.
It’s a good example of why looking at the full financial picture can sometimes open up options beyond the traditional “sell first, then buy” approach.
Buying your next home before selling your current one isn’t the right approach for everyone, but it can be an option when the numbers stack up.
At Ironbark Group, we take the time to understand your overall financial position, your plans and what you’re trying to achieve. We can then look across our network of lenders to explore the options available and work through how the numbers could fit together.
Since 2010, Ironbark Group Australia has been helping clients navigate everything from straightforward home loans to more complex lending scenarios, backed by more than 200 years of combined experience across our team.
Thinking about buying before you sell? Talk to Ironbark Group about your options today.
Bridging finance is a short-term lending solution that can help you purchase a new property before selling your existing one. It effectively provides a financial bridge between the two transactions, allowing you to secure your next property while you arrange the sale of your current home. Once the existing property is sold, the proceeds are generally used to reduce the outstanding debt. Whether bridging finance is suitable depends on your overall financial position, the properties involved and your ability to manage the repayments during the period when you own both properties.
Potentially, yes. Buying before selling can be an option where your financial position supports the additional short-term lending required. Bridging finance may allow you to purchase your new home without having to wait for your existing property to sell first. This can give you greater flexibility when searching for your next home and remove some of the pressure that can come with trying to coordinate a sale and purchase at exactly the same time.
A bridging loan temporarily helps cover the gap between buying your new property and selling your existing property. During the bridging period, you may have lending secured against both properties, resulting in a higher overall debt position and potentially higher repayments. Once your existing property is sold, the proceeds are generally used to pay down the bridging debt. The exact structure, costs and repayment arrangements vary between lenders, so it is important to understand how the numbers work before proceeding.
Bridging finance is generally designed to be a short-term arrangement, so lenders will typically have requirements around how and when the existing property is expected to be sold. The timeframe can vary depending on the lender and the individual circumstances. Having a realistic sale strategy and a clear understanding of the expected proceeds from the existing property are important parts of determining whether bridging finance is appropriate.
They can be. One of the key considerations when using bridging finance is managing the period where you own both properties and your overall debt is temporarily higher. Before proceeding, it’s important to make sure the higher short-term repayments are manageable and that there is a clear plan for reducing the debt once the existing property is sold. This is an important part of assessing whether bridging finance is suitable for your circumstances.
No. Bridging finance can provide useful flexibility, but it isn’t the right solution for every property buyer. Your income, existing debt, property values, available equity, expected sale price and ability to manage the higher short-term lending position all need to be considered. A clear exit strategy is particularly important. Looking at your overall financial position before committing to a purchase can help determine whether buying before selling is a realistic option.
