Before you start trawling the property listings, take a moment to jot down your motivations.
Why do you want to move?
What problems would you like to solve?
What are your non-negotiables for a new home?
Being clear and specific on the essentials will give you a strong starting point. Taking the next step to rank those needs will help you save even more time and zero in on the best homes for you.
Now is also a good time to have a look online and figure out the ballpark budget you’ll need for properties that match your criteria in the areas you want to live.
2. Figure out your equity
Equity is the amount of money that would go back into your pocket after selling your home and repaying what’s left on your mortgage.
If the value of your home has gone up since you bought it, or you’re ahead on your repayments, great job! You’re likely to have equity in your current home. This equity can be used as part of your next home loan, as security or for a deposit.
So, how do you find out what equity you have?
First, you’ll need to get an appraisal to understand the market value of your home. From there, deduct the amount you still owe on your mortgage – your equity is what remains.
With your new home checklist and your equity nutted out, it’s time to find out how much you can afford to borrow and repay.
As a general guide, repayments on your new home shouldn’t be more than 30% of your take-home salary. And to avoid financial pressure, your home should cost no more than 3 to 5 times your household income.
Here are some questions to think about:
What is your salary now and is it likely to change in the future?
How would increasing or decreasing your monthly repayments impact you?
Whether you’re buying or selling first, getting a pre-approval is the next, and most important, step in scooping your next home. Once you’ve selected the home loan you want, speak to a lender about what you could borrow to get the pre-approval process rolling.
Buying first? You’ll need to show you can pay the deposit for the new loan (through savings or bridging finance) and handle repayments for two loans until you sell your current home.
If you’re selling first, a pre-approval will help fine-tune your search and give real estate agents confidence that you’re serious about buying.
Either way, you’ll need to get a bit of information together so we can assess your application:
What type of properties you’re looking at
Where you’re looking to buy
The amount you’re looking to borrow
Your salary and income
Your general expenses (food, bills, rent, etc.)
Your assets (cars, shares, etc.)
Your debit (personal loans, credit cards, etc.)
Talk it through with our team
We’re honest, transparent and fair. Get in touch for some no-nonsense information.
With your pre-approval in hand, you’ll be crystal clear on what you can afford. That means it’s time to get out there and find your next home! Keep a record of all the homes you visit – pictures are handy, written notes are essential.
And remember to check back to the notes you made in Step 1.
Key questions for each property:
Is this house within my budget?
Does this house have all the things I said were important?
What are the five pros and cons of this property, how does it compare to others I’ve seen?
You’ve found a home you like. It ticks all your boxes (or most of them) and it’s in your price range. If you’re confident that this is the home for you, and all the inspections check out, it’s time to make an offer.
Once you’ve agreed on a price with the seller, link in your lender to ensure all the finance is assessed and approved so that you can get ready for settlement.
Now that the financial aspects of the home purchase are largely taken care of, it’s time to focus on settlement. Usually, you’ve got a few weeks or months in between when you buy your next place and when you’ll move in.
This is a great time to get all your ducks in a row:
Work with your conveyancer or solicitor to finalise the details of the settlement process
Consider what kind of insurance you might need for your new place – whether that’s building, contents or both
Get ready for your pre-settlement inspection to double check everything is right before keys change hands
Plan for your move by hiring a moving company or enlisting the help of friends and family
Make sure to also notify utility companies, banks, the AEC and the post office of your change of address
Oh, and if you’ve yet to sell or rent out your current property, now’s the time to get that in full swing so you can minimise financial losses.
After settlement is complete, you can finally get into your new home and start making it your own!
While it’s important to take a beat to celebrate your new digs, it’s also a good idea to get on top of the everyday realities of owning a home. As a seasoned property owner you’re probably aware of what it takes to maintain a property.
That said, while your mind is in the real estate space, take the time to set yourself up for success – whether it’s nabbing a good deal on utilities, figuring out how to pay off your new loan sooner, or just keeping track of those ever-changing interest rates.
^ Interest rate is only available to owner-occupied loans on liteBlue and myBlue principal and interest repayments with less than or equal to 60% Loan to Value Ratio (LVR). Interest rates for investment loan purposes, interest only loans and other applicable LVR tiers will differ.
^^ Comparison rate based on a secured loan of $150,000 over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different comparison rate. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.