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Bridging finance
Exploring the options
If you are thinking of upgrading or downsizing, planning is the
key to a successful transition. This may be first selling your
existing home before buying another home, or organising bridging
finance so that you can purchase your new home first. Some loans
are portable, which means you can switch the property you use
to secure your loan – subject to the lender’s approval.
This would still be a g-ood time to review your current loan
and examine the options available to you. Some questions to
think of are:
Will I need to increase my loan?
If the cost of your new property including purchase costs is
higher than your existing loan facility, you will need to consider
paying the difference yourself or increasing your loan. I can
help you work out how much you can borrow.
What are
the costs?
The costs associated may include fees for discharging your
current loan if not portable, break costs on the loan, establishment
and valuation fees for the new purchase, government stamp
duties on the new property, building inspections, moving costs
and other fees or charges payable to your old or new lender.
If you do decide to move, download a copy of my Moving
Checklist.
Can I get bridging finance?
Bridging finance allows you to buy your new property first before
selling your existing home. It means you will keep your existing
home loan as well as taking on the new home loan. During this
time, the interest is paid on both loans so it is important
to make sure that this is an affordable option before taking
on this expense.
Is my current loan portable?
Not all loan products or lenders will offer this feature. You
will need to check your Loan Agreement to see if you can “substitute
security”. I can make these enquiries on your behalf if
you are uncertain or unable to find the answers.
Should
I move or renovate?
The two most important factors for most people are: cost to
move to a better property and avoid the inconvenience of renovations
and weighing up the advantages and disadvantages of moving to
another suburb. Download a copy Renovate
vs Move checklist to give you a handy reference.
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