Buying a new home when you already own one is a tricky business, and it's something that we deal with on a very regular basis.
The key thing about trading up or upgrading your house is working out how you want it to play out. How are you going to place an offer on that new house?
Whether you decide to sell your home first, or buy your new home before you sell, there are pros and cons to consider for each option.
Selling your own home unconditionally first, so that you can buy a new home with confidence, is probably the safest and easiest option. But you do need to have some temporary accommodation lined up so that you have somewhere to live if you haven't found your new home by the time your house has sold. This can be difficult, especially if you have a young family, but it is going to be the easiest.
Offer subject to sale of your home
Alternatively, you can place an offer on a new house that is subject to you selling your home first. This does make things a little easier, however people in this scenario struggle with making a competitive offer in a busy property market. The challenge is getting a vendor to accept an offer subject to the sale of your home when you are competing with other cashed-up buyers.
Buy first — bridging finance?
Another option is to place a cash offer on a new home before you've unconditionally sold your existing house. This is the most riskiest option and the hardest to finance. If you don't have the cash on hand to do this, you would need to apply for open bridging finance from a bank.
Getting approved for bridging finance is not easy. It requires at least 20% equity on both homes and a strong financial position so that you can cover the mortgage payments on both houses until your existing home is sold.
Contact us now to discuss your options with one of our friendly team of mortgage experts.