- The buy first, sell later property lending models includes the use of bridging loans
- A bridge loan is a short-term loan that can be used by a borrower until permanent finance is secured
- Bridging loan specialist has received over $1 billion in loan applications since launching last year
With many buyers still priced out of the market, homeowners are now looking to different finance solutions that are not offered by the traditional lenders.
Despite the slowdown this year, property prices have risen by 11.2% nationally over the past 12 months, with a higher rate across the capital cities.
Many older Australians have capitalized on this growth and cashed in on the boom. Many of these downsizers are commonly Baby Boomers, who are taking advantage of alternative financing options.
One such option is the ‘buy first, sell later property lending model – which involves using bridging loans.
Often, homeowners miss out on their ideal home thanks to the traditional slow approval process or not having enough funds for a deposit. This is when bridging loan came into play.
A bridge loan is a short-term loan until an individual (or company) secures permanent financing, or pays an existing obligation.
One such provider is Bridgit, a tech-driven bridging local specialist. In the less than 12 months since its launch, Bridgit has hit $1 billion in loan applications.
The average loan size is $1 million, with the majority of the customers from Sydney, Melbourne and Brisbane.
Mortgage broker Nick Jacobs and capital markets specialist Aaron Bassin established Bridgit in mid-2021 upon witnessing a gap in the market that provides fast property finance solutions while avoiding a monthly and lengthy process.
Along with the billion-dollar milestone, Bridgit has been on a growth trajectory since launch, having raised $13.2 million equity, and secured $100 million in venture debt funding.
“We’re extremely thrilled to have hit $1 billion in loan applications, a milestone that gives us confidence our product is helping Australians make the most of property opportunities,” said Mr Bassin.
“Our mission has always been to challenge the traditional lending model and provide Australians with a new solution that actually helps them progress.
“Our customers have loved the flexibility of being able to use a fast bridging loan solution – providing them with an option to buy first and offering many benefits, particularly for retirees or downsizers who want to buy on their terms without having to sell first.”