10 Important Financial Steps to Purchasing Your Next Home
While there are many things that you will need to do physically to your home to maximise its selling price, it is important to understand all of the financial impacts leading up to and during the sale of your existing home and the purchase of a new home. Even though the selling process may differ from State to State, sellers should consider the following suggestions before listing their home with an agent:
- Check your credit score
Having a good credit score will better your chances of getting approved for a loan and even negotiating a lower interest rate. The earlier you check your credit report, the more time you have to improve and maintain your credit score before applying for a home loan.
- Determine how much your house is worth
Obtain a market appraisal from real estate agents within your local area or ask us for a free property report. This will give you an idea of the price range for your property and other homes in your suburb.
- Estimate your costs to sell
Agent’s fees, advertising, solicitor/conveyancer, property adjustments, surveys all add to the cost of selling a home. Make sure you shop around to get the most cost-effective service providers so that these can be factored into your financial plans.
- Understand your existing mortgage payout and associated break costs
Make sure you understand the cost of exiting your current loan to ensure that there are no hidden costs or break fees.
- Determine the cost of making necessary repairs
Fixing outstanding maintenance items will help improve the value of your home and avoid buyers asking for a reduction in the purchase price.
- Estimate your costs to buy a new home
Costs may include loan application fees, transfer and mortgage stamp duties, valuation and lender’s legal fees, solicitor/conveyancing fees, building/council inspection, pest inspection, home and contents insurance, adjustments for council and utility connections.
- Factor in the moving costs
It’s incredible how many possessions one can accumulate over the years. Packing and transporting all your belongings to a new place can cost a sizeable amount, especially if the move is interstate. Follow our helpful tips to keep moving costs down.
- Obtain pre-approval for a new home loan
As your financial circumstances may have changed since your last purchase, ensure you can obtain finance to afford your new home or to determine how much you are able to spend. If you believe bridging finance will be required, please discuss this with your lending specialist.
- Be prepared to negotiate
Buyers expect to get a good deal in today’s market. Be realistic about your selling price. Understand your negotiation strategy and stick to it. Once you have considered all of these financial impacts, you should prepare a budget to ascertain the net proceeds from the sale of your home that will be available to purchase your new home. Then stick to your budget.
- Maximise the use of mortgage calculators
From calculating how much you can borrow and what your repayments will look like, budget planning, comparing home loans to calculating the stamp duty on your next property purchase, our free online calculators can be invaluable tools to help you get organised.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of selling your home and are ready to make the next move buying or investing, you can contact us for information about the best options for you when it comes to your mortgage.