When it comes to upsizing your home, the mission can feel like a high-stakes balancing act. There’s the question of timing, the issue of finance and the need to address a variety of family needs that vary from one situation to the next. Whether you’re chasing a bigger floorplan for a growing brood or simply seeking a lifestyle shift, “how” is just as important as “why” when it comes to this homeowner milestone. Here are five considerations to keep in mind when moving through the process.
1. Understand how equity could help
“Many people don’t realise they may not need a deposit in-hand if they have enough equity,” explains Jay Lee, home-lending executive at CommBank. “If you’ve held a property in a major city for a decade or more, the equity itself may not be a problem due to property-value growth.” How much equity you can use will depend on your property value, existing loan, borrowing capacity and lender requirements.
What this means is that you may be able to buy before you’ve sold. Stephanie and Travis Hudson did just that when they came across their dream home in Warners Bay, near Newcastle, in NSW, before selling their existing one in nearby Charleston. “We wanted a house where family can come and stay and where the kids have room to grow,” says Stephanie. And having paid off most of their existing mortgage, they were able to avoid unnecessary upheaval by finding the perfect spot before making a move. “We didn’t put our place on the market until an offer was accepted on the new house.”
2. Weigh up bridging finance
For people keen on finding their ideal home before selling their existing one, bridging finance – which covers the time between buying a new property and settling on the sale of your existing one – is one option.
“A lot of customers are turned off at the idea of a bridging loan, thinking about paying two lots of interest for the period they hold two properties,” says Lee. “But once we start unpacking the costs of moving twice or paying rent somewhere while they look for another house, the sums can sometimes look a little different. Bridging loans can be a way to have your cake and eat it, too.”
3. The power of local expertise
For upsizer Joshua Uebergang and his family, who made the move some 1400 kilometres from their home in Toowoomba to Adelaide, selling first was the only option that made sense. But when it came to finding the right place in Adelaide, the family was reluctant to rent in the interim so enlisted the help of a buyer’s agent.
“There’s no substitute for someone who knows the market as well as which streets to avoid and can walk through a property on your behalf the same day it lists,” says Joshua. This allowed his family of five to move straight into their new home on day one, avoiding the chaos of a mid-move rental period by timing settlement with their sale in Queensland.