Smooth Lifestyle Transition with Flexible Bridging Home Loan

Our clients are a middle-aged couple seeking bridging finance for a six-month period to facilitate the transition between properties. They owned a lifestyle block located near a rural town on the West Coast of New Zealand’s South Island, with a small mortgage held by a mainstream bank. The clients had entered into a sale and purchase agreement to buy a new home in a nearby town.

Although the couple’s situation appeared suitable for traditional bank financing, their application was considered as high risk and was declined by their existing bank lender.

• The open-ended nature of the bridging loan – their current property had not yet been listed for sale, creating uncertainty.
• A portion of the requested funds was intended for cosmetic, non-structural improvements to the lifestyle block to enhance its marketability.

While the clients’ existing lender saw roadblocks, we took a holistic approach and identified several positive factors:

• Both properties have a strong overall loan-to-value ratio (LVR), despite one being a lifestyle block and the other located in a small town.
• The client has a clean credit history with good scores.
• Both applicants were stable PAYE employees.
• They requested capitalisation of interest to reduce cash flow pressure during the bridging period.
• The exit strategy was clear with the planned sale of the lifestyle block.
• Upon sale, all debt would be repaid, leaving the client with substantial surplus funds.

LVR

59% across both properties

(No registered valuations required.)