What is upgrading?
Upgrading simply means selling your current home and purchasing one that's a little further up the property ladder. There can be a raft of good reasons for upgrading. As the kids get bigger you may need more space. You may be hoping to secure a better location. You may be keen to trade up from an apartment to a house. Or you may be relocating for work purposes.
Whatever your reason for upgrading, it’s important to think through the financial aspects. You have probably built up sufficient home equity to be able to afford an upgrade but you should also consider how you'll fund the move.
Refinancing is an option
The process of upgrading can be an opportunity to refinance your home loan. This involves taking out a new loan to pay off your current mortgage. Refinancing can also give you access to improved loan features or a more competitive interest rate.
Or you could take advantage of loan portability
Alternatively, your existing home loan may offer a feature known as 'portability'. This means you can take the same loan with you when you move from one property to another. If you’re happy with your current loan this option can provide savings on the costs that may apply to refinancing. It can also be very convenient as you're dealing with the same lender and retain the same account number.
Speak with your Mortgage Choice broker
The key thing is to speak with your Mortgage Choice broker to talk through the available options for funding your upgrade. This will let you know just how you stand in terms of borrowing options, leaving you free to focus on selling your current home and choosing your next property.