Is it time to upgrade your family home? Is the current home feeling a bit small and tired? Is it time to move on? If so, you won’t want to miss out on expert advice from our very own Kristin Tunbridge and Marissa Schulze.

We’re here to help you understand the steps to make it happen, important considerations to keep in mind, as well as the options you have to make the right decision in line with your long-term financial goals.

1. Work with the right team!

If you’re feeling like you’re starting to outgrow your home, the first thing you must do is ensure you’ve got the right team of experts guiding and supporting you throughout the journey.

Working with a dedicated broker who keeps your best interest first and can help you conduct a financial fitness health check to understand your current options, will grant you a clearer picture of your possibilities to discover opportunities and improve your financial position if needed.

Whether that be by getting rid of credit cards you’re not using or looking at ways to reduce your expenses, there are little things you can do in the early days of the process to set yourself up for success!

Sitting down with your broker and working out what you can afford (in terms of deposit and repayments) as well as your borrowing capacity, will also help you plan for the road ahead. Things like your savings, equity from your existing home, and lifestyle expenses are just a few of the considerations that come into play when performing this assessment.

Doing this well in advance will help you ensure you are in the best financial position to afford the home you are dreaming of!

That’s great but I’ve already found my dream home! What now?

Though we really recommend getting started with sorting your finances first, we can still help if there is a last-minute property you have fallen in love with!

Our friendly team will work with you to conduct those financial checks and arrange all documents needed, guiding you and connecting you with the right network to make your dream home upgrade a dream come true!

2. Assess your options

So you’ve worked the financial side of it, are aware of how much you can afford and know your borrowing capacity.

The next step is working your way through the options available. Generally, the best-suited option for your specific circumstances will depend on two factors; finances and practicality.

There are 5 main options you can consider when thinking about your dream home:

• Selling your existing home and buying or building your dream home
• Keeping your existing home as an investment property and buying your dream home
• Making an offer “subject to sale” of your existing home
• Making the most out of bridging finance to upgrade to your dream home or
• Renovating or extending your current home

Let’s break these down by comparing their pros and cons in detail.

Option A: Selling your existing home and buying or building your dream home

Out of all the options above, selling your existing home to buy or build your dream home is the option with less financial risk.

Basically, you know exactly how much money you’ve got, how much you are willing to use as a deposit, and how much you can put towards the entire purchase.

Though this option can be extremely attractive finance-wise, lining up the sale of your existing property with the purchase of your new property can become tricky. Extended settlement timeframes or not finding the right property on the market are some of the challenges you may encounter when choosing this option.

Is there a way to mitigate these risks?

Absolutely! Remember step one of the process? Leaning on your team of experts can help you find the right answers. Working closely with the agent, conveyancer and your broker is the best way to either reduce and mitigate those risks or negotiate settlement periods to line them up as closely as possible.

If you are thinking about building, it is very important to keep in mind that construction periods may change, meaning your build could take a lot longer than expected! Relying on the advice of your team of experts will help you ensure this process occurs and is managed as smoothly as possible.

Option B: Keeping your existing home as an investment property and buying your dream home!

During the initial assessment with your broker, you may have found out that keeping your existing property to turn it into an investment property, may be compatible with your goal of upgrading to your dream home.

Property investment is a great way to build wealth and can also help in terms of practicality, as you wouldn’t have to worry about moving out from your home until you have found the right one!

Even if this option does not seem like a suitable alternative at first, you may find that taking into consideration the additional rental income you can get for the property as well as tax benefits that often come with it, can make this possibility a lot more feasible for you. Once you have moved into your dream home, you always have the option to sell the property if it does feel like a bit of a stretch financially or becomes too overwhelming to handle.

When it comes to considering this option, there’s an additional bonus you may want to keep in mind. Owning an investment property can provide you with passive income that will support you later on in life, improving the outlook of your retirement and potentially your everyday living.

Bonus tip? If you’re currently putting additional repayments into your mortgage, it may be better to put the additional payments into an offset account, so that you can keep that home loan as high as possible. On our blog, you can find out more about offset accounts and other tips to reduce loan costs and save.

Option C: Making an offer “subject to sale” of your existing home

This option can be a fantastic alternative if the owners of the property you are looking to buy are happy to accept it.

Though it may come with restrictions in terms of timeframes and put on the pressure to sell your existing property, you can ease these by making sure your property is ready to go on the market!

As a buyer, you must know that when two offers reach a seller, they are more likely to accept the one that is not subject to sale if both offers are for similar amounts. Speaking with the agent and building good rapport with them can help you understand what the market is looking like, and whether an offer that is “subject to sale” is likely to be accepted. Placing an offer that is slightly higher than what you would have offered if the subject-to-sale condition was not in place, can be an option to increase the chances of having it accepted.

If peace of mind and an easier transaction are what you are after, paying that premium to make sure this happens may just be the right choice!

Option D: Make the most out of bridging finance

Have you heard about bridging loans?

They are short-term finance options that cover the gap between the purchase of your new property and the sale of your existing home.

The main thing to keep in mind when thinking about these is that bridging loans can be quite expensive, and other finance options do exist.

Bridging loan interest rates are traditionally much higher than your average loan, and there are additional fees involved. Bridging loans also require you to have equity in your existing home, and may therefore not be suitable for your particular circumstances.

With this in mind, there are occasions in which bridging loans are indeed the best financial choice for you, so working with a broker to assess these and other options, is always advisable.

Option E: Renovating or extending your current home

An upgrade does not necessarily mean buying an entirely new home!

Renovating or extending your existing property are very valid ways to upgrade and make your home the dream you wish to live in!

If you’re keen to have an extra bathroom or need more space for the family, this is a great option to consider. It can also be the right choice if you already live in an area you love and truly enjoy living with your neighbours.

Ultimately, using your property as equity or getting the bank to value your property as if the upgrade or extension had already been completed can help you secure the finance you need.

Though you may have to think about finding a space to live while the upgrade is happening, this option is usually cheaper than buying a new home because it means you won’t have to pay additional stamp duty costs, and can also elevate the overall value of your property.

As your trusted partners in this journey, we are always here to guide and empower you through the process. Our award-winning brokers are here to provide expert advice at no cost, connecting you with the right professionals and putting in the legwork so you can focus on the fun stuff.

Ready to get started? We’d love to help!