There is quite often a lot of talk about first home buyers and getting into the market. Today, we focus on those who already own a home and are looking to upsize or upgrade their current property and purchase their second home. If this is you, then here are a few ways to go about it.
Use the equity in your home
As an existing home owner, you are already in a much healthier financial position as you don’t have to work nearly as hard to build up a deposit when considering buying your next home. If your current home has risen in value thanks to rising property prices in your area, you may already have enough equity to cover your deposit. What’s more, having already established a good borrowing record, securing finance for your next home is that much easier.
If you don’t have enough equity in your existing home, you’ll need to boost this with savings which means you may have to put your plans on hold until you’ve built up a sizeable savings fund or you’ve paid a little more into your existing mortgage.
Look for a deal
One way to keep moving up the property ladder is to look for a good opportunity – a property that may need a little work initially but will ultimately bring in a good return on your investment when you sell, whilst meeting the needs of your growing family in the meantime.
You could try buying on the outskirts of a desirable area where properties may be more affordable but likely to increase in value over time, or buy “the worst house in the best street” and renovate or refresh to bring it up to standard. Sometimes just modernizing a kitchen or bathroom, a decent paint job or a garden makeover can improve value and help build equity, so try to look beyond the imperfections.
Refinance your home loan
Whilst making plans for change, it is also a good time to review your existing home loan and think about refinancing. You should also compare your existing home loan with any new opportunities to refinance, as this could well be a chance you could enter into a new arrangement with more favorable conditions.
Working with a professional mortgage broker from the start can help set you up with the right home loan to maximize your investment. We have a great relationship with Search Mortgage Brokers, and can recommend them if you would like to discuss your finances so as to ensure you are getting the best loan possible.
Lastly, enjoy the process of looking for your new home. Take your time to explore new areas, attend open inspections to get a feel for the market, and establish good relationships with local agents who would be happy to help you find your next home.