Ready for more space or a better location? Upsizing can be exciting, but it comes with higher costs and financial commitments. Here’s how to prepare for your big move:
1. Understand your finances
Start by calculating how much you owe on your current mortgage and the equity available from its sale. Make sure you have savings for the extra costs of upsizing, like a bigger deposit, moving fees, and possible renovations. Get a professional valuation to set realistic expectations for your sale.
2. Check your borrowing power
A more expensive home means reviewing how much you can borrow. Factors like income, expenses, and debts matter. Nectar Mortgages can help compare lenders and secure pre-approval, showing sellers you’re serious. With fluctuating interest rates, it’s crucial to understand how they’ll affect your future repayments.
3. Budget for stamp duty
Stamp duty is a significant expense in property transactions, and the amount you pay increases with the value of the property. Be sure to use your state’s stamp duty calculator to factor this in.
4. Plan for other costs
Remember to budget for agent fees, legal costs, moving expenses, and any upgrades or repairs needed for your new home.
5. Consider bridging loans
If your buying and selling timelines don’t align, a bridging loan might help. It lets you buy before selling but usually comes with higher interest and fees. Check in with your Nectar broker to see what your options are and if it suits your budget.
6. Prioritise needs vs. wants
Upsizing is a chance to get the features you’ve always wanted but be realistic about what you can afford. List essentials (like extra bedrooms or proximity to schools) and nice-to-haves (like a big backyard) and balance needs with affordability.
7. Prepare for higher living costs
Bigger homes come with bigger bills. Be ready for higher utility costs, council rates, and maintenance expenses.
8. Think long-term
Upsizing is a big commitment, so consider your future financial stability. Look at factors like job security, potential income changes, and how long you plan to stay in your next home. A property in a sought-after school zone may increase your home’s value, but ensure it aligns with your long-term financial goals.
Final thoughts
Upsizing offers more room and better amenities, but careful financial planning is key. Understand your borrowing power, budget for extra costs, and seek professional advice to ensure a smooth move. Before making your final decision, consult a financial advisor or your Nectar broker to set a clear plan and make your upsizing journey both exciting and financially sound.
Disclaimer: This article provides general information only and does not constitute financial advice. Please consult a licensed financial advisor or mortgage broker for advice tailored to your specific situation.