This document contains information about various real estate financing options:
- Agreement in Principle allows potential home buyers to get pre-approved for a mortgage before making a full application in order to strengthen their position when making offers.
- Acquisition Costs are expenses associated with purchasing property such as commissions, fees, and taxes.
- Bridging finance provides short-term funding for property developers until a more permanent solution can be found, allowing quick access to capital. However, bridging loan rates tend to be higher than conventional loans.
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•Prior to finding a property to purchase a purchaser can ‘pre-qualify’ their
borrowing ability prior to a full mortgage application. Vendors will view any
purchasers who have an agreement in principle as being in a stronger
position to move quickly.
Agreement in Principle:
•Incidental costs associated with securing ownership of real property such as
agent commissions, mortgage application fees, professional fees and stamp
duty.
Acquisition Costs:
•Bridging finance is a short-term financing option for property developers
aimed at overcoming a temporary financial need until a more permanent
solution is found. It can be an effective way of getting fast access to finance.
Though bridging loan rates are often higher than conventional loans their
short-term nature means they can be cleverly used to maximise profit.
Bridging finance:
• Application
• Validation
• Selection
• Interview
• Orientation
