How can I raise money for a new house for a short period?


I am looking to buy a new property after selling my existing home. The interested buyer wants a time period of six months to pay the sale proceeds while I need funds immediately for my new home. Should I opt for a home loan now and repay the bank when my deal goes through? Is it advisable?


You have two options when it comes to buying a new house. Either you can tell your prospective buyer to pay the money upfront or look for another buyer who is ready to pay immediately. In case you are unable to find a new buyer or the first buyer is not in a position to pay you immediately, you can go in for a bridge loan.

Bridge loans are just like ordinary home loans where bank lends money for down payment to buy the new house till the time your current house gets sold.

Bridge home loans provide funds either equivalent to the value of the existing property or 80% of the cost of the new property to be acquired. The maximum tenure for bridge loans is 1-2 years and the interest rate varies between 14%-18%.

Do check with your bank if they are offering bridge loan. If not, you can search online to see for the possible options


Hi Vichu,

You can consider a Bridge Loan. A Bridge Loan is essentially a short-term loan that gives you the money to make a down payment for your new house before you get the funds from the sale of your old house. Banks usually extend a one year window to their Bridge Home Loan customers to repay the amount.

The eligibility and documentation requirements to avail a Bridge Home Loan are similar to those of a regular Home Loan.

Banks offer Bridge Loans to customers only after entering into a formal agreement with them pertaining to the sale of the borrower’s property. In case there is no formal agreement to sell the existing property, banks usually offer a six month to one year window to sell the property and repay the loan. The maximum repayment tenure for Bridge Loans is two years.
On one hand, Bridge Home Loans buy borrowers time to sell their existing property, and on the other hand, it equips them with funds to make a down payment towards the purchase of their new house.

In case the borrower is unable to sell the property within the stipulated period, banks usually convert the Bridge Loan to a simple mortgage loan. Post conversion, banks keep the old property as mortgage and convert the Bridge Loan to a regular Home Loan with a higher rate of interest.

Looking for a Home Loan? Click here.

BB Expert