Taking the next step on your property journey can be a very exciting time, whether you’re upgrading, downsizing or just moving to a new location, we can help.
You’ve been through this process before and have some understanding of what’s involved, and you know a few things will be different this time around.
You may hold significant equity in your existing home resulting from the market value increasing over the years or by making extra mortgage repayments. This equity could be used towards the purchase or construction of your next home, whether as security or to help with the deposit. We can help you understand the amount of equity you have available and your borrowing capacity.
Once you understand your equity position and borrowing power, you may choose to keep your existing home and turn it into an investment, alternatively you may sell this property or simply use the equity to renovate your current home and stay where you are.
If you’re going to sell your existing home, you’ll need to decide whether you sell or buy first. It would be easy moving if your existing home sold at the same time as buying your new home, but it doesn’t always happen this way. Here are some things to consider…
Buying first
Pros
- You can take your time when finding and buying your new home.
- You’ll avoid moving twice and paying rent between selling and buying.
- You could benefit from a rising property market for both properties.
Cons
- You may need a bridging loan with a higher interest rate to afford your new home.
- You’ll be paying for two mortgages at the same time.
- It may take longer than anticipated to sell your existing home, creating pressure which could cause you to sell for less than expected.
Selling first
Pros
- You’ll know exactly how much deposit you have towards your new home.
- There’s no need for a bridging loan, so you won’t be paying two loans at once.
- You can take your time when selling your existing home, which allows you to wait for the right offer and gives you the ability to negotiate an extended settlement period that can be utilised to find your next property.
Cons
- You may have to rent for a period of time and end up moving twice.
- A rising property market could mean that you get less house for your money, pressured into buying something that’s not quite right or being priced out of the market.
Whatever option you choose, we always encourage you to seek independant taxation and financial advice.
At Rhythm Finance Co we’ll help you navigate every step of the process, so that you can relax knowing we’re working hard for you. We don't charge any fees for our service, because the lender pays us once your loan has settled. It’s important to understand that we work exclusively for you and your best interests. Rhythm Finance Co is family owned, our brokers are local to the Coffs Coast and are keen to help you with buying your next home.
