Are you at that exciting point where you’re ready for something bigger or better to call home. While it might seem daunting, upgrading your home doesn’t have to be overwhelming when you know what to expect.
Look at your current situation
First thing to do is understand how much equity you’ve built. Equity is what your home is worth today minus what you still owe on your mortgage. This becomes your secret weapon for your next purchase, potentially serving as your deposit or helping you secure better loan terms.
How to buy before you sell
Have you heard of a bridging loan? Think of them as a financial bridge that lets you buy your new home before selling your current one. This means you can make stronger offers and aren’t stuck in the stressful situation of being homeless between properties. Yes, they cost a bit more in interest, but the peace of mind and negotiating power often make it worthwhile. One of our Mortgage Advisers will be able to help you decide if this is the right solution for your situation.
Lending rules change and evolve
The lending world has likely tightened up since you bought your current home. Banks are now looking more closely at your debt-to-income ratio – basically, how much you owe compared to what you earn. They’re also stricter about checking you can actually afford the repayments long-term. Every lender is different, and our Mortgage Advisers know the in-and-outs of many banks and non-banks. Let their expertise help guide you.
Loan options you may not know about
When setting up your new mortgage, there are so many options:
Split loans – let you have part fixed and part floating rates – giving you the best of both worlds.
Offset mortgages – link your savings to reduce interest.
Revolving credit – gives you flexibility (though it needs discipline).
A Mortgage Adviser can help you work out what will work best for you.
Budget for hidden costs
Hidden costs can add up quickly, so factor them in early. These could include agent fees, legal costs, potential break fees on your current mortgage, building reports and moving expenses.
Should you keep your current home?
Here’s something to consider – what if you didn’t sell your current home at all? Keeping it as an investment property could be a smart long-term move. You’ll have rental income helping with the mortgage. However, being a landlord isn’t for everyone. You’ll need to handle tenants, maintenance, and ensure you can afford both mortgages if the property sits empty. The tax implications are different too, so it’s worth talking to an adviser on whether this path makes financial sense for your situation.
Get pre-approved first
Getting pre-approval before you start house hunting is a great idea. It shows sellers you’re serious and helps you act fast in competitive markets. Come and talk to one of Cole Murray’s Mortgage Advisers to get you started!
How can Cole Murray help?
What is the key to a smooth house upgrade? Get good advice early. Come and chat with a Cole Murray Mortgage Adviser, they can help you navigate all these options and find the best solution for your situation.
