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Everything You Need to Know About Buying Your Next Home
The dust has settled on your first home — you have paid down your mortgage — and you are now considering buying your next one.
As per your previous experience, you anticipate that this time is going to be just as challenging and exciting, if not more.
Before you make another major financial decision, read more to learn everything you need to know about buying your next home.
What you need to consider before buying your next home
As buying a house comes with many highs and lows, there are things you have to ponder upon before undertaking this potentially life-altering
event. It may be useful to have a think on the following questions:
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What are your practical reasons for buying a second home (e.g., moving closer to your family, job, or school, upsizing for a growing family,
downsizing to save costs, etc)?
- Do you understand what your current expenses are?
- Have you set yourself a budget?
- Do you know how much you can borrow?
- Do you know how much your deposit should be, and can you afford it?
- Have you considered how long and how frequently you are going to stay in the new property?
- Do you know what your new monthly repayments will be?
- Have you worked out a savings plan for rainy days?
- Have you done your research of the area?
- Are you planning to sell your current property?
- Are you aware of what the upfront and ongoing costs are going to look like?
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Are you in the position to get another home loan?
Common reasons for buying a second home
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Holiday home: A holiday home is an option you can explore if you want a second home as a resthouse or secondary residence.
You can also have rented for short term periods.
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Selling your current home: Selling your property before you buy lets you know exactly how much you have to spend on your
next home. On the other hand, buying before you sell is generally a riskier proposition. Read this article
to help you decide whether or not you should buy or sell first.
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Family: It is commonplace for parents to buy a property for their children or assist them in purchasing one.
- Retirement: Some elderly people purchase a home for retirement to hold wealth or downsize.
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Investment: A second home is a great way to build your property portfolio and get into the property investment market. Look
for an affordable investment property in an area where there is a high tennant appeal.
Can you use the equity in your current home to buy your next home?
Equity is the difference between your home’s current value and the amount you have left to pay on your home loan.
You can access the equity in your current home to finance your deposit for your next home if you have made extra mortgage payments over time
or if the market value of your home has increased.
Talk to a professional mortgage broker to know more about your equity and your borrowing capacity.
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What are the costs associated with second home purchase?
There could be additional upfront and ongoing costs you have not dealt with before when you bought your first home.
These costs include, but not limited to:
- Bridging finance
- Stamp duty
- Real estate agent fees
- Transportation costs
- Lenders Mortgage Insurance (LMI)
- Legal fees
- Building and pest inspections
- Property valuation
- Remodelling
- Connection fees
- Landlord insurance
- Repairs and breakages
- Property maintenance
- Council rates
- Body corporate fees
- Mortgage repayments
Find out more about these costs
Find out more about these costs
Talk to us
Your next home purchase must have careful planning and constant sound advice from a professional.
To get access to competitive home loan rates, talk to a Pivotal Financial specialist and let them do all the work
for you to ensure you have not just a Pre-Approval but the right loan, right rate and peace of mind knowing your next move is your best
move.
Book an Appointment
Book an Appointment
