Whether you’re upsizing, downsizing or just moving to a house in a new location, your situation has probably changed since you last bought.
Here’s a refresher on some of the finance options available when you’re purchasing your next house and a few other key considerations.
The straightforward approach: Sell your current house to pay for the second
If you’re not planning to keep your property as an investment, one way to keep the transition as straightforward as possible is to sell your existing dwelling before buying the next.
Plan B: Consider a bridging loan
A bridging loan gives you access to funds to buy your next property before you’ve sold your current one, which isn’t always an option.
The lender adds the value of your new home to your existing mortgage, then subtracts the likely sale price of your existing property. You’ll need a property valuation for each property.
Typically, you pay interest-only on the entire loan amount until the first property has sold and the principal is repaid in full. Bridging loans are sometimes structured so you only make interest repayments on the loan until settlement, capitalising the interest due on the rest of the loan. Either way, once you have sold your existing property, the loan reverts to an ordinary home loan.
Should I buy first and then sell?
Build your property portfolio: Consider investing
Do you really need to sell your existing property? With Australian dwelling values continuing to see record growth, now might be the time to consider growing your wealth through investing.
Should I invest?
Whatever your circumstances or situation, we’d be happy to help you set up the most suitable plan to achieve your financial and property-buying goals. Get in touch with us today!