October 08, 2016
Nothing lasts for ever and the same is true about your home. Eventually you will decide to sell and if you are a ‘first time mover’ you’ll probably be wondering how to arrange another purchase.
Frequent questions include “How do I pay a deposit on the new home?”, “Should I sell first?” and “Do I need bridging finance?”. Here are a few thoughts.
Usually agents request a 10% deposit if you buy at auction or private sale. One or more of these methods can be used:
- Use redraw on an existing home loan;
- Use cash from a savings account;
- Arrange additional finance on your current property in preparation of a purchase;
- Get a Deposit Bond;
- If you’ve already found a buyer for your home, arrange to have their deposit released.
Most people prefer to wait until they sign the contract for their next home before they start the sales process on the current home. This has obvious appeal because you aren’t committing to a move until the right property is found. However, there are significant risks that could cause you a lot of stress:
- Will you be able to sell your home and settle in time to settle on your new purchase?
- Even if you own two properties for one day it will require bridging finance. Will you qualify?
- There could be a shortfall of funds if you don’t sell for the anticipated price. Are you able to borrow more than expected?
It’s safe to say we’ve helped many other people to move with a minimum of fuss so don’t hesitate to discuss your plans with us.