redms Moving House | Redlands Mortgage Solutions

Moving House


Next Home Buyers

It can be a tricky manoeuvre to change homes if the equity you need for your new home is tied up in your existing home. Essentially, there are 3 options:

  • Sell your existing home and temporarily rent while you find your new home.

    The advantages with this is that you know exactly where you stand with regard to equity for your new home, and you don’t have to worry about selling your existing home within a particular timeframe.

  • Get a bridging loan.

    This is where the bank will provide you with a loan for your new home on the proviso that you sell your existing home within a certain timeframe, usually 6 to 12 months.

    While this is a convenient form of funding, because you can move straight from your existing home into your new one, it poses a couple of risks. The important thing is to go into it with eyes wide open, so talk to us about how it will work and what to be careful about.

  • Convert your existing home into an investment.

    Depending on your circumstances, this could be a great way to start an investment portfolio.

    The first advantage is that you can move straight into your new home from your existing home. From that point, your existing home becomes an investment property.

    The key advantage from an investment point of view is that you are getting an investment property free of the government property transfer charges, and without real estate commissions. Also, if you sell the property at a later date, you will still get the capital gains tax concessions associated with the property being your principal place of residence (speak to your accountant about it).

    Finally, be sure to speak to us about how to best structure your loans for maximum tax effectiveness.