They say (I don’t actually know who ‘they’ are) that buying your first home is one of the scariest, yet exciting life-experiences you will go through. Was the thrill of owning your very own home offset by the fact that you had one very large debt to chip away at for 30 years?
It was for me – but admittedly I had no idea about the power of mortgage brokers at the time.
I actually think moving from your first home, and into your next one is scarier. Ok, scary is a bit much – let’s just say more stressful. You made the leap all those years ago, and have made a real home out of it. Usually, though, there comes a time when you want to upgrade and find something more suitable; more rooms for more little humans, more space for a pool, closer to the beach, closer to the right schools, or maybe just a change of scenery.
Recently I read a report that mentioned nearly half of the people surveyed expressed that arranging finances for their upgrade was their biggest stressor. Furthermore, 41 per cent said that the stress of saving and the financial strain associated with the process caused the most amount of stress.
Only last month we helped a young couple access funds for their upgraded home. Unfortunately, they had agreed to a very short finance clause with the sellers – they really wanted that house, so they took the gamble and signed.
Selling one, to buy another can be nerve-racking if you don’t have everything lined up first.
You need to know – within reason – that your sale price will be met, and that obviously comes with an impetus on time depending on your situation. Just as importantly though, you need to make sure your financials are set up for a smooth purchase on the new property.
This is where people can sometimes get unstuck: thinking that their finances were fine ‘then’ so should be fine now. That’s not always the case – bank policy and credit assessment processes are frequently reviewed, and it’s not necessarily something that you as a customer would keep up with (though, it most definitely is for us).
The financial position you were in when you purchased your first home, may have changed. Maybe your family has grown since then. It’s fair to say that at the very least your living expenses will have changed. Lending criteria most definitely have changed. Maybe your loan structure simply no longer suits your current situation as best it could.
All of these changes need to be analysed and considered before you jump into that new purchase, so leaving the finance part until the last minute is a big risk and can cost you money if you aren’t proactive in setting it all up before you sign the dotted line.
That doesn’t mean it is an impossibility, or that it shouldn’t be a positive experience. Ok, moving sucks – and we can’t help you with that. We do know how to make the process of organising finances as pain-free and speedy as possible though.
Whatever the reason for your upgrade, there is a need to make sure you get the finance part of it right. It’s not just about accessing a great rate but making sure you are comfortable with the loan structure, the product features and how the new purchase will influence your family budget.
Only last month we helped a young couple access funds for their upgraded home. Unfortunately, they had agreed to a very short finance clause with the sellers – they really wanted that house, so they took the gamble and signed. Thankfully they called DLS just before signing, explained what they were doing and we rallied into action, quickly getting all the vital information for an approval.
The fast thinking couple were able to meet the 14-day finance clause thanks to a speedy approval, with a very specific loan structure that set them up for a good financial future.