Tips for Upgraders
There comes a time when it's time to move on from the house you're living in. Here are some strategies to help you achieve a new purchase smoothly and perhaps sooner than you think.
Consider purchasing the new property and retaining the property you are living in now. You can either choose to rent out the new property or the one you are living in. An Extreme broker will be able to advise you on what your borrowing capacity is for the new purchase. The beauty of this option is that you can build your asset base by having two properties - if, after going down this track, you can't get used to the higher loan repayments you can consider selling the old property in your own time.
- If your borrowing capacity isn't enough to purchase the new property at the same time as keeping your old one, you can put an offer in on the new property "subject to the sale" of your existing one. You can simply market the old property at the same time as securing the new property - just move in once your property is sold. The downside of this option is that it's not always easy to fit in with the sellers plans so you might need to do a bit more negotiating than usual.
- Bridging loans are another way of securing the new property if the seller doesn't like the idea of a subject sale offer as described above. When you take out a bridging loan, the lender gives you the money required to purchase the new property as well as some extra cash to be able to pay for the new loan while you are waiting to sell your old property. The rules for bridging loans are a bit complicated so it's best to have a chat with a broker to see if it would work for you.
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