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Guide to upgrading your home

Aug 26, 2021 | Home Loan Information & Tips, Research, Resources, Self-employed Loans

Managing finances to make it happen sooner

Upgrading and buying your next home might be easier than you thought. There are a number of ways to give yourself the flexibility to buy the right house, in the right area for your family, even before you sell your current home. This guide explains the different options for upgrading your family home – including bridging loans – so you can move quickly when you find the right property.

  1. Buying first vs selling first
  2. Keep your old home as an investment property
  3. Extended settlement
  4. Bridging loans
  5. Loan portability
  6. Refinancing
  7. Deposit bonds

Buying first vs selling first

Sell first

One of the positives is you’ll know how much money you have to spend on your new home, and you won’t have to pay off two home loans. However, if you’ve already sold and don’t find a suitable house to buy before settlement, you may be faced with even more costs:

  • paying rent – you’ll need to live somewhere!
  • additional removalist fees
  • additional utility connection costs
  • storage costs

Not to mention the headache of moving house twice! Asking the buyer for an extended settlement can help, though they may prefer the standard settlement period of 4-6 weeks.

Buy first

If you buy before you sell, you may have to make repayments for two home loans until you do sell. There’s no knowing when you’ll sell your house, so how long you’ll make double loan repayments is uncertain. You can try to negotiate with the vendor for an extended settlement.

If this doesn’t suit, a trusted lender will help you bridge the gap with:

  • Bridging loans
  • Deposit bonds
  • Refinancing
  • Loan portability
Mortgageport has helped hundreds of Australians upgrade their family home, and we’d love to assist you too. Talk to us today for an obligation-free chat on 1800 100 747.

Keep your old home as an investment property

Investment property is a great way to grow assets and build wealth, using the equity you already have built in your current home. The rental income helps pay off your investment home loan. By keeping your home you’ll avoid paying stamp duty and avoid the time and costs of advertising and selling.

However, you also need to consider the following before deciding to keep your old home as an investment property:

  • Is the area popular for renters?
  • Will your rental return be relatively high?
  • The tax benefits of investment properties may not apply if you are increasing a home loan to buy a new property
  • Tax deductibility may be reduced by loan redraws you’ve made in the past, such as cars, boats and holidays

Talk to your lender or financial adviser for more information, who can help you decide if turning your old home into an investment property is the best option for your personal circumstances.

Extended settlement

When you buy or sell a home, contracts are signed and exchanged, and a deposit is paid to the vendor. This is followed by a period of 4-6 weeks during which time enquiries are made and documents prepared solicitors or conveyancers. Settlement is when the full amount of the sale price is paid to the vendor, and you become the legal owner of the property.

Although the standard settlement is 4-6 weeks you may be able to negotiate a longer period – known as a delayed settlement or extended settlement. This gives you, and the buyer/vendor party, more time to manage the gap between buying and selling.

Bridging loans

A bridging loan provides the funds you need to buy your next home before you’ve sold your current home. It enables you to pay the deposit to secure your new property and covers other buying costs such as Stamp Duty. Once you settle on your old home, the proceeds of sale are paid as a lump sum to reduce your interest repayments on the bridging loan. The bridging loan then becomes your new home loan.

Mortgageport offers very competitive rates on Bridging Loans tailored to your specific needs. We keep your bridging loan costs low, with no establishment fees or ongoing account keeping fees.

Got questions about Bridging Loans? Mortgageport is here to help. Call us today on 1800 100 747.

Loan portability

Loan portability means transferring the loan on your current home across to your new property. Some home loans offer this as a feature, so you won’t need to refinance when you upgrade to your next home. Bringing your old loan with you works if you’re selling and buying at the same time. While you have the convenience of staying with your current loan, and you don’t need to pay for bridging or refinancing, there are normally fees attached to using this feature. If you’re sure the loan you already have is the best deal for you, then loan portability may be worth exploring.

Refinancing

Upgrading can be an opportunity to refinance your home loan. This means taking out a new loan to pay off your current mortgage, to get improved loan features and/or a more competitive interest rate. If you’re thinking of refinancing, remember it’s important to get good financial advice to be clear on all the costs and fees, and, of course, to make sure you are getting a better deal.

Mortgageport is a non-bank mortgage manager, and we take the time to understand your personal situation and tailor the best refinancing home loan to your situation. We’ll find you the best rates and coordinate the switch to a better loan to support your family home upgrade.Upgrade your home today with a Refinancing Home Loan from Mortgageport. Call 1800 100 747 to talk to a friendly Loans Consultant.

Deposit bonds

A deposit bond can be used to pay part or all of the deposit to secure your new property. The deposit on a home purchase is normally paid when contracts are exchanged, or at auction where you’re the successful bidder. Benefits of using deposit bonds include:

  • Ready access to cash for a deposit so you can secure the right property when you find it, even if you haven’t sold your current home yet
  • Relatively inexpensive – depending on the lender of course
  • You might avoid the need for bridging finance

Deposit bonds avoid the need to use your own immediate funds, but you’ll still need to pay the full deposit and purchase price at settlement.

Ask a Mortgageport expert if deposit bonds are right for you. Call 1800 100 747 today.

Don’t just take our word for it
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Jesse, Rozelle, NSW
My partner and I connected with Mortgageport after being dissatisfied with what other brokers were offering. Clint said he could do much better for us and he delivered! It didn't matter that we had some financial hurdles to overcome, Mortgageport looked at us as people and understood what we needed. Very happy to recommend Clint and the team to anyone looking for a better deal.
Simone, Caloundra, QLD
As a first home buyer in an extremely difficult and high demand market, I could have easily been overwhelmed with the process of buying. Julianne Walsh was introduced to me initially when I was not 100% financially ready to purchase. She provided advice on what I needed to achieve and made suggestions on how I could personally reach these goals, in order to be in a better financial position. Over the course of 11 months while I focused on these goals, Julianne would reach out to me every few months to see how I was going and would provide me with the words to motivate me to keep saving. To not be forgotten in a very busy environment was refreshing, I wasn’t just a number! Whilst I navigated my way through purchasing my soon to be home, Julianne was always only a phone call away. As a first time buyer you have questions that you might feel embarrassed to ask, not with Julianne. Her level of communication, efficiency and commitment constantly exceeded my expectations, not to mention her kind and patient personality. Thank you Julianne for helping me achieve my goals!
Ryan, Neutral Bay, NSW
I would like to highly commend and recognize Christian for his exceptional work regarding my recent home loan. With my particular loan, there were many complications and obstacles that arose that were out of his control and Christian managed the process professionally and ensured that I was well informed throughout to a level that I am sure is above and beyond most standard loans. We settled on time and achieved a great result all round. I wanted to send this to you and thank him. I will be recommending him to anyone I know who is looking for a home loan or to refinance and would be happy to provide a reference or quote in any marketing material. Thank you again, Christian, you've done an incredible job!
Adrian, Gold Coast, QLD
Such a great team and very knowledgeable. We were recommended to use them by a friend and honestly I couldn't think of a way to make the process better or smoother. Very very helpful and understanding, also very easy to talk to. I would absolutely recommend them. Special shout out to Clint.
John Paul, Boondall, QLD
Julianne came highly recommended from a friend who used her services many times before. Her abundance of knowledge, ability to understand my situation and approachable nature took all the stress away and allowed me to continue on with my busy work schedule with very little interruptions. She was contactable day and night, very professional and friendly and i could have not of asked for a nicer person to be dealing with. I would not hesitate in recommending family and friends to Julianne in the future.
Frances, Barton, ACT
“Dear Col, Well the house has exchanged!! I would like to thank you for all your dedication and persistence in order for this to happen. I know you said that you were only doing your job but your efforts were above and beyond the normal call of duty. Thank you”
Kim & Paul, Dee Why, NSW
“Mortgageport was originally recommended to us by our financial adviser. We are very busy people and don’t have the time to dedicate to finding the best home loan for our needs. We were glad that Mortgageport stepped in to help us. We found that they were pleasant and thorough and really knew what they were doing, this gave us a lot of confidence. We would recommend them to anyone looking for a home loan.”
Jessica, Seven Hills, NSW
“Thank you for the excellent service your company provided us with our recent refinancing of our loan. The speed you executed all correspondence with us, either with fax, phone or post was outstanding. It was so good to just sit back and feel everything just fall into place. All your staff were courteous, friendly and understanding of our needs. In particular Gloria who looked after us from start to end. Please thank all your staff involved with our financial needs.”
Marisa, Isaacs, ACT
“We are a boutique accounting practice in Canberra with a focus on property investors. Our clients are delighted with the incredible research and effort that Mortgageport make, the feedback is always so positive. Of course with this type of feedback, without reservation, we recommend Mortgageport to anyone that needs a loan. I personally always use Mortgageport for my own personal financing needs; they are knowledgeable and always have my best interests at heart. Every team member at Mortgageport goes the extra mile, I am not just a number but a client that is well looked after and my concerns always matter.”
Susie, Sydney, NSW
“Dear Glen, I would just like to express how impressed I have been with Beth, she has been a great support and her assistance has been invaluable, I could not have done without her advice; being rather a novice at all this it has been so good to have her advice and backup which she does in both a professional and empathetic manner.“
Linda, Chatswood, NSW
“Mortgageport did a brilliant job! I never ceased to be amazed at your patience and perseverance, not to mention efficiency, while organising the refinancing of our existing loans and financing the new property at Wobby Beach. We are very pleased with the way you set up the loans with St George and have found them extremely efficient and helpful.”
Fay, Boonah, QLD
“We were initially referred to Michael McKelvie at Mortgageport in early 2005 when we wanted to begin to put together a portfolio in Queensland. Our dealings with Michael went so smoothly, that we have continued to deal with him through multiple transactions to the present day. In our experience Mortgageport has a great team, they are professional and timely and have been able to provide exactly the right product for our needs. We have even utilised Mortgageport for personal real estate purchases as well. We continue to use Michael McKelvie and Mortgageport and will continue to do so, and have recommended Mortgageport to others and have absolutely no hesitation in doing so.”
Michael, Sydney, NSW
“I had an investment loan with a major lender for a holiday rental property in Culburra Beach. Unfortunately, I was not given a very good deal and I was also disappointed with the level of customer service. After investigating my refinancing options, I found that Mortgageport offered the tailored approach I was after. I wanted the process to be simple, streamlined and above all personalised. Glen Spratt, Mortgageport Managing Director, took the hassle out of the process by dealing directly with my accountant and the bank, briefing me when necessary. Glen secured a competitive rate and managed my expectations about dealing with the Bank of South Australia, a lender I hadn’t dealt with previously. I have been extremely satisfied with the outcome and have already recommended Mortgageport to five other colleagues.”
Loli, West Hoxton, NSW
“I am overwhelmed with how efficient you and your office are. I was advised by a friend that these things take weeks to put together. Well wait till I tell her it only took 24 hours. Once again, thank you for all your help.”
Jane, Rosebery, NSW
“Dear Michael, We remember you well from a few years back. We know we are in capable hands and all our contacts with Mortgageport consultants have been highly professional and positive.”
Chris, Canberra, ACT
“I have dealt with Mortgageport on two occasions now (specifically with Michael McKelvie) and have found not only their service to be of the highest professional standard, but they are also such a lovely friendly team to deal with. In a country where I feel the service industry has to a large degree fallen apart, the team at Mortgageport have always gone above and beyond the call of duty to address and guide me and my young family with time, patience and a really easy-going approach with all our mortgage related endeavors. I am not an investment banker or necessarily fabulous with facts and figures but still believe in equity and sustainable growth. I look forward to working with Mortgageport to develop a property portfolio now and well into the future.”
Tim, Maroubra, NSW
“I was introduced to Mortgageport by my father (one of Mortgageport’s first customers), back in late 2002 when I bought my first home. Since then, I have transacted four additional mortgages using their services. Each time I have found the advice to be professional, accurate and insightful as the staff draw from their considerable experience base. I am repeatedly delighted by their friendly personable approach, and the efficiency and speed of the way they do business.”
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