No, you don’t have to miss out on your dream home just because you can’t sell your current one in time.
What you could do with is a Relocation, Bridging or One Move Changeover Loan.
What is relocation finance?
Relocation, Bridging or One Move Changeover loans allow you to buy your next home and move into it, before your current home has even sold.
How does it work?
Your lender will advance enough funds at settlement to cover the purchase price of the property you’re buying, plus all associated costs.
If you currently have a home loan, the lender may lodge a new mortgage on your current home to secure the additional funding. It’s important to note that in the event your current home hasn't been sold and settled, or construction isn't complete at the end of the relocation loan finance term, the lender may increase the interest rate or place the mortgage into default.
Am I eligible?
Not all lenders offer these types of loans, and the policy for relocation finance can vary significantly among the lenders who do make it available.
One of the most important factors when lenders assess your eligibility is having enough equity
in your existing home.
Some lenders will assess your ability to service the relocation loan based on the end debt that remains once your existing home has sold and settled. Other lenders will assess your ability to service the interest on the peak debt – which includes the following:
- Your new loan
- Your current home loan
- Funds needed to settle the property you’re buying
- Any capitalised interest which may accumulate over the loan period
It’s imperative when you purchase your next home that you speak with your preferred mortgage consultant, as this will help you figure out if you’re in a position to purchase property before you’ve sold your existing home.
For more advice on buying your second property, feel free to contact us
now to speak to one of our Project Sales Managers today.