Individuals over the age of 50, and particularly those nearing retirement age, seeking to take out loans often find themselves being given a very hard time when trying to take out a home loan or other large loans. They may be wealthier in assets and investments than their younger counterparts but their long-term earning potential is where the problem lies. Lenders will see this as high risk and often reject the loan application.
An ongoing trend has seen older borrowers looking into alternative funding sources such as loans from niche lenders. The demand for bridging loans has grown considerably in recent years, particularly among this demographic. Bridging loans are short-term loans that can be accessed quickly and easily. These types of loans are popular for home renovations or as a deposit for a new home.
So what is it that makes bridging loans so popular amongst over 50’s when many young borrowers may not even have heard of bridging loans?
Financially Savvy
With age comes wisdom and experience, making borrowers over 50 years old much more financially savvy and smart with their money. This demographic has likely bought and sold many properties in their lifetime and likely secured numerous home loans (some which may even be paid off).
Because of this experience and being rich in assets, people over 50 are more confident in their finances and much more open to considering alternative sources of finance like bridging loans.
Retirement Investments
With the average life expectancy increasing year on year, people over 50 are searching for ways to keep a steady stream of income and financial stability to support them during their twilight years. Many purchase second or third properties to earn rental income. Finding well-priced properties is often achieved through an auction, so folks often turn to bridging loans to secure a deposit for their investment properties because it’s a fast and convenient way to access cash.
Downsizing
Once the kids have flown the coop and a big house is no longer a requirement, selling the family home and downsizing is considered a wise move financially. The sale proceeds can be used to top up the pension fund or as a down payment on an investment property. A bridging loan can also be obtained in order to renovate an older home before selling it to try to get more out of the sale or as a cash deposit on a new home to avoid the headache of applying for a home loan. Simply pay back the bridging loan using the sale proceeds when your home sells.
Apply now for a bridging loan and unlock a world of opportunity for financial wellbeing and investment.