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Once you have decided to downsize or rightsize your property, you can start to look forward to a fresh start in a new place to love with a relaxed environment. However, investing in a new house is a big decision, so you need to consider many factors before jumping in.
The process will be much easier if you gathered all the relevant information, thought carefully about each step and sought the right advice.
This guide will point you in the right direction, but it is always advocated that you seek professional advice before making a decision.
First, you need to ask yourself why you are downsizing?
Do you want a smaller home because of a career move or lifestyle change? Are you downsizing because you are retiring in a few years? These questions are just some of the many you must ask yourself, which help you set the budget.
Also, analyse where you wish to move and the type of property you would like. What home features can you live without? What are features non-negotiable to you?
Under the scheme, downsizers can put $300,000 from the sale to their super. This government initiative enables Aussies to advance their superannuation and potential income streams using the share of their larger home sale proceeds.
A bridging loan is a short-term loan and offers up to six months to sell the existing property. If you are looking for a smooth transition to your new home, you might want to look into it. It may help you navigate this uncertain time, although under current market conditions you could expect a quicker sale.
1. 100 per cent loan on the new property
If you bought a new house outside your current borrowing capacity, it would become affordable once selling your existing home. A bridging loan can enable you to borrow up to 100% of the new property’s purchase price, including the associated costs.
2. Interest capitalisation
You can look into bridging loan with an interest capitalisation if you cannot cover both properties’ repayments. It provides you with some financial breathing space while waiting for the sale of your existing house.
It is a big question for anyone moving from one house to another – should you sell your property before or after you buy? Both options have pros and cons.
You need to think wisely about which option is most suitable for you and if you feel bewildered, then consult our property consultant for a better understanding.
Moving to a smaller property does not necessarily mean it is less expensive. Even if you profit from your current home sale, you still require to count the expenses you may incur.
Some of the expenses you must take into account are:
Case Study
An Unusual Circumstance?
Simon and Lily’s family was growing, and they were keen to move from their townhouse and buy a larger family home.
Coincidentally Lily’s parents were looking to downsize to a smaller property. They were happy to gift the property at Mawson Lakes to their only daughter Lily and partner Simon, who would assume the outstanding debt of $356,000 and treat that as the purchase price, representing a 65% LVR.
With our Clear Specialist loan, we could get the loan approved for Simon and Lily as a favourable purchase.
You have decided to downsize or upgrade your current property and build up enough equity to move ahead with your decision, if you are wondering which direction you should take, then connect with our loan specialist for a no-obligation consultation to answer all your questions and doubts.
Just call me directly on 0435 856 649 for a quick chat.
Steve Barker
Loan Consultant
Ph: (08) 8263 4009
Mob: 0435 856 649
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”