At some stage you may start thinking about stepping up to your next property. We explain how to maximise your buying power.
Reaching the next rung of the property ladder isn't as easy hanging up a ‘For sale' sign and waiting for buyers to make a too-good-to-be true offer. But there are strategies that can help you climb higher a little quicker.
One of the best aspects of being a home upgrader – or ‘second stepper', is that you don't have to work as hard to build decent deposit. If you chose you first home with care, you may have considerable equity in the property, and this can go a long way towards paying for your next place.
In addition, upgraders have an established borrowing record, something that can be a real asset when it comes to securing finance to fund your next home.
Minimise buying costs
That's not to say upgrading to your next home is all beer and skittles. It can also come with some hefty costs – in particular stamp duty.
Government figures show the average Australian moves about every five years. That can mean paying a lot of stamp duty over the course of your adult life. For second steppers, who received the First Home Owner Grant on their first property, the full cost of duty can come as a shock.
One way to minimise this cost is by exploring schemes that could see you entitled to a financial helping hand from your state/territory government. If you buy or build a new home in NSW for instance, you may be entitled to the New Home Grant Scheme. It provides a grant of $5,000 towards the purchase of new homes, homes off the plan and vacant land on which a new home will be built. The value of the new home must not exceed $650,000 and the value of vacant land must not exceed $450,000. You can download our guide below to understand all the government grants and schemes that may be available to you.
Your Mortgage Choice broker can explain any government initiatives you may be able to tap into.