Like all borrowers, homeowners and second-time buyers are impacted by the rise in mortgage rates and the tightness of the market. This leads to an increase in relay loan requests.
In an uncertain period for real estate, due to ever-increasing mortgage rates, bridge loans are doing well. According to the Central Funding, demand for this type of credit has increased by 12%.
More flexibility
Relay loans make it possible to support second home buyers when selling their property, explains Sylvain Lefvre, president of the Central Finance Department, in a press release. This is a solution that avoids being obliged to immediately sell the property and which allows transactions to be carried out with greater flexibility. This adaptability, necessary in a tense real estate context, is very much in demand since we note that the demand for bridging loans has increased by 12%.
As a reminder, the bridging loan allows a borrower to buy a new property before having sold the previous one. The bank will agree to lend a sum (between 50% and 80% of the estimated value of the propertyminus the remaining capital d) that the borrower will repay once the sale of the first property is made.
Real estate loan: the relay loan, a solution not to forget to buy a new property
Several factors may explain this increase. With the tightening of credit granting, there are fewer potential buyers. Rising interest rates also lead to a reduction in buyers’ budget. As a result, real estate transactions may take longer.
Especially since buyers are often looking for the same type of property. Once the rare pearl is found, better it is then worth positioning yourself quicklyeven if it means selling your property afterwards via a bridging loan.
Real estate loan: find the best rate