Relocation can be a big step. Throwing yourself back in the hands of the mortgage Gods can seem exhausting. There is little doubt that moving is stressful at the best of times, but when it comes to choosing between mortgages for your relocation, we can take the stress out of it for you. There are a few different mortgages that can help you out, and we can make sure you get a deal that suits you. There are two loans that are specifically created for those moving – bridging and portable loans. If you have found your perfect home and want to grab it before someone else does, but haven’t sold your house, yet a bridging loan can help. We use both properties as collateral until your existing property is sold, and offer you an interest-only loan. Portable mortgages allow you to take the same loan with you during relocation.
What other home loans can I use when I move house?
Traditional home loans can also help when it comes to relocation. Helping you realise your property dreams is what we are all about, and from the time you decide you want to relocate, to the time to move in, and beyond, we have experienced and knowledgeable staff that are the envy of our competitors. It all starts with our variable and fixed mortgages. Our standard and basic variable mortgages offer you flexibility and great rates. Our fixed rate mortgages make budgeting easier, locking in an interest rate for between one and five years.
How much can I borrow?
Finding out how much you can borrow is an important part of making any relocation decision. We believe you shouldn’t worry that you won’t be able to purchase your dream home. Our programs can help you become pre-approved and start putting everything in place to find your new home, even if you haven’t sold your existing one. Our specialists will help you very, very closely, so you have the best chance possible in the pre-approval process. You will need at least 40% equity in your current home and enough annual income to make higher loan payments when it comes to relocation. You will need to make those payments in between the purchase of your new home and the sale of your current one. The hard work really is worth it, because the savings, freedom and convenience you create will be worth it.
What if I need more money during relocation?
During relocation, you might want to do extra work to either house. You might need to do a bit of work on your current home to help it sell, as well as a few renovations to your new one. It’s rare to find a new home that is exactly as you want it to be. That can mean you need a bit of extra cash, and it’s important to factor that in when looking for relocation mortgages. This is one area where our experience and knowhow can help you through the whole process. Relocation mortgages can allow you to make the deposit on your new home and finance the balance of it at closing, which can be important if you are looking to improve your existing home before putting it on the market. This can take the stress out of the time between buying and selling. To successfully apply for one of these loans, you will probably have to sell your existing home within six or 12 months. That can give you plenty of time to get things ready. Once you have sold your old home, the surplus from the sale is used to reduce the balance on your relocation loan. But our help and knowhow doesn’t end with the settlement. Our home loan advisors can then work with you to find the best deal we can to refinance the loan on your new property. That’s the kind of service we pride ourselves on.
What loans are designed for moving?
As we mentioned above, there are two mortgages designed specifically to help people selling one house and buying another. Bridging loans gives you the convenience of not waiting around for your existing home to sell before you can agree to buy another one. Bridging loans are interest-only loans that use both houses as collateral. As a result, the interest rate can be comparatively high, as you will be paying interest on two houses, until one is sold. Bridging loans can be relatively quick to arrange and not a lot of documentation is required to set them up. On the flip side, bridging mortgages can attract additional fees and costs, which is something to always be aware of. At Mortgage House, we can help in relocation by organising a portable loan for you. Portable loans allow you to take your current mortgage with you when you move house. All your bank details will stay the same, which is always handy, and you can eliminate any mortgage fees, loan stamp duty. All in all, that could save you thousands.
What types of relocation loans are available?
In today’s mortgage market, choosing the type of loan that is suitable for you and your family can be difficult. There are many different kinds of home loans, with many attractive features and it can be easy to get lost in the detail. One detail that doesn’t get a lot of publicity is that some home loans have features that can make it easier for you to relocate. There are two main kinds of relocation loans – portable loans and bridging loans. Most home buyers take out a mortgage for 20 years, 25 years or even 30 years, and most of us won’t live in one property for that long. So, having a portable loan, one that you can take with you when you move, can be a handy feature. Having loan portability means that when you move, you will have the same loan, with the same features, the same interest rate and the same terms and conditions. The only difference may be the loan amount.
Bridging loans are a way to manage your home loan between buying a new home and selling your current one. As someone with an owner occupied loan, a bridging loan can help you to snap up a new home, so you don’t miss out.
What do you need to consider when applying for a relocation loan?
There can be both advantages and disadvantages to using relocation mortgages, and it is important to understand them before you apply for a loan. The first is to make sure you understand the terms and conditions. That will include how long you have to sell your current home if you choose a bridging loan, what the repayments will be and how they are calculated, and a range of other conditions someone not involved with real estate on a regular basis may not be aware of. Another important thing to remember is stamp duty. If you are buying an existing property, you may have to pay stamp duty, so adding it to your calculations is important. As a home buyer, banks and lenders will agree to offer you bridging loans, generally between 6 to 12 months This means you may only have a year to sell your current home. That may seem like a long time, but in a seasonal market, a year can come around quickly. Having a relocation loan means you may eliminate some fees, such as mortgage exit fees, and you can also speak to our mortgage experts about adding to your home loan if you need to. Another thing to remember is that bridging loans often carry a higher risk, so interest rates can be higher than regular home loans.
How long does it take to arrange a relocation loan?
The good news is that loan portability is a feature of a lot of home loans so it may already be included in your mortgage. If you do need to add money to your loan, to buy your new home, contact your bank or lender to find out how long that may take. The other good news is that using a relocation loan or getting bridging finance should take less time than if you have to refinance your existing loan, and your bank or lender should have an idea of your existing equity, which can be another factor. Bridging loans usually don’t take too long to organise. Your bank or lender should be able to get back to you within about three business days.
What documents are required to apply?
Perhaps the most important documentation when you apply for a loan to relocate is evidence that you are moving. That means documentation around the contracts of the home sale or purchase. It can also be worth getting both homes valued, which can smooth the process with your bank or lender. If you are simply relocating, then your existing bank information and repayment details don’t need to change unless there is a change in loan amount. Your BSB and bank account numbers can remain if you want them to.
What options are available if a relocation loan isn't right for me?
If a relocation loan or a bridging loan is not suitable for you, Mortgage House can help you with a range of other home loans, whether they are principal and interest or interest-only loans. Our range of mortgage calculator options can help you match loan repayments up with your budget, and they can also help you identify our range of both fixed rate and variable rate home loans. Speak with our lenders and let us know whether your financial situation, such as income, expenses or credit card limits, has changed since you applied for your current home loan, and we will help you find a suitable mortgage for your property goals. If you are after an alternative to a bridging loan, a deposit bond, which is an insurance policy guaranteeing deposit payment at settlement, may be suitable.