Buying your next home

QBANK's Home Loan Hub is your guide to upgrading your home. Whether you need more space as your family grows or you're simply ready for bigger and better.

When you're ready to upgrade there are a number of things to consider. Do you buy first or sell first? Do you know how much equity you have? Before you commit, make sure you are well informed so you can make the best decision for your financial situation.

Buying: Research the market

Start with a wish list for your new property with non-negotiables. How many bedrooms and bathrooms do you want? Is having a pool a deal breaker? Are you looking in one particular town or suburb (or even street)? Upgrading means you may be planning on staying in this property for the long-term, so think about how your needs might change as your family grows.

If you’re thinking about moving because you’re short on space, renovation could be another choice. If you’re attached to where you live but want to upgrade with an extra bedroom, a pool or knock down a few walls for a complete makeover, a reno could be the answer. You’ll save on selling and moving costs like stamp duty, commission and removalists.

QBANK tip: There’s a common myth that renovating adds equity to your house (or an increase in the valuation) equal to what you’ve invested. This is not usually the case. Putting in a pool for $30,000 doesn’t necessarily add $30,000 to your property value.

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Getting it right: Sell or buy first?

When you’ve got your eye on a new home, it can be a balancing act to decide whether to put your home on the market first or start looking for your new property. Like most property decisions, there’s pros and cons to each approach.

There’s more risk attached to buying before you sell your existing home, but it can be done.

Buying first means:

  • Choosing a new home without the pressure of a settlement date looming
  • Buying at a time when the property market suits you
  • Taking a risk on how much your existing home will sell for
  • Taking out a bridging loan or other finance to cover two mortgages
  • You’re under more pressure to sell, so you might end up taking a lower offer.

Selling first means:

  • Knowing the budget you have to work with from the sale of your home
  • Less pressure to take a lower offer – but more pressure to find a new home once you sell
  • No juggling two loans or a bridging loan
  • You might need to find temporary accommodation between moving out and finding a new home – which means moving and storage costs
  • Taking a risk that property prices won’t rise between selling and buying.

QBANK tip: Talk to trusted local real estate agents to get an idea of what the market is doing where you want to buy and sell. This will give you an idea of supply and demand and help you calculate the likelihood of a quick sale and a quick buy.

Talk to a Mobile Banking Specialists about how bridging loans work, and the best timings for buying and selling, or get some smart financial advice.

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Selling: What is my home worth?

Knowing the value of your home is a good place to start if you want to sell and upgrade. You can get a free QBANK Property Report on your own home for an idea of the market conditions in your area. This may be a good time to get a real estate agent on your team – they can help you set a realistic price for your property.

QBANK tip: Having the right real estate agent on your team means you can get a heads up when your perfect upgrade property is available. If your agent knows what’s on your wish list and you have pre-approved finance, you might even be able to snap up your dream home before it gets onto the market.

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Understanding equity: Making your money work for you

Equity is the value of your home minus the existing debt. You may be able to access the equity in your current home as a deposit for your next home. You can also use this property as security for the loan on your next home – and it may mean less pressure to sell.

QBANK tip: Using equity you’ve built in your existing home loan may mean you can avoid a bridging loan when you buy a new property.

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Balance the budget: The costs of buying and selling

If it’s been awhile since you bought your existing home, it’s a good idea to get across the upfront costs that come with buying a new home like building and pest inspections, real estate fees, stamp duty, conveyancing, council rates and settlement fees.

If you’re upsizing to a bigger home, your costs are likely to rise as well. Your electricity bills and rates will be higher, and maintenance may be more expensive (especially if you’re adding a pool to the mix).

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Borrowing power: How much can I borrow?

Your financial situation may be a little different now from when you bought your first home. Use a budget planner to go through your monthly income and expenses, and a borrowing power calculator for an estimate of how much you may be able to borrow now. This will help you work out how much of a deposit you need, and whether you can cover it using equity in your existing property.

QBANK tip: Putting a little money into sprucing up your home can help get the best price. Some decluttering, landscaping and a fresh coat of paint can add loads of value to your home.

Talk to one of our Mobile Banking Specialists about how much you can afford to borrow so you can look for a new home in your price range.

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House hunting: Choosing your step-up home

Looking for a home when you can afford to upgrade is exciting. You’ll still have a budget to stick to, but it’s likely to be more than your first home. Try to be clear on why you wanted to move, and don’t compromise on what you want. If you’re moving for more space, don’t settle for a similar sized place because you like the view. Stick to your upgrade goals.

When you find a home you're keen on, get a free QBANK Property Report – specific to the home you’re making an offer on. Your Mobile Banking Specialist, can provide details about the property, estimated value and sales and rental history. They'll also be able to take you through the application process and what paperwork is needed.

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