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Let us meet Jim and you can Nancy

Jim and you can Nancy features an apartment in the city that they intend to offer. They have an existing mortgage equilibrium of $three hundred,100 towards the apartment.

But before capable offer the apartment, they see a property get real the market industry in the an excellent place that they don’t want to overlook.

It apply for a connecting mortgage and possess recognized, during which the fresh new couple’s present $300,100 financing will get new bridging mortgage that have a max mortgage label out-of 12 months.

Towards new house, the happy couple will get recognized getting an excellent $600,one hundred thousand mortgage. This means the couple actually have a good $900,one hundred thousand shared financial obligation ($300,000 current personal debt in addition to $600,100000 new home mortgage given that peak loans).

Circumstances step one: The flat comes

The happy couple sells their flat half a year down the road getting $eight hundred,one hundred thousand. Of this, $three hundred,100000 can be used to clear their initially financial equilibrium for the possessions, which was marketed. This renders them with leftover proceeds out-of $one hundred,000:

• $400,000 reduced $three hundred,100000
• Equals $one hundred,100

If your couples decides to set it $one hundred,one hundred thousand into clearing their residence mortgage as well, upcoming their property financing are quicker to help you $500,000:

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