Page 13 - Smartline eBook - Upgrading your home
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 Considerations when buying
Selling your existing home when you buy
Once you know what you can expect to get from the sale of your existing home, discuss this with your Smartline Adviser, as well as what you owe on your current mortgage (including any fees). This will give you a good idea of how much you will have available to put towards a deposit on a new home.
If you’re taking out a bigger mortgage, think about how much you’re comfortable borrowing. If you’re concerned about making repayments, your Smartline Adviser can help you find a solution by taking into account your full financial circumstances and making allowances for any potential changes to income or expenses.
Keeping your existing home when you buy
If you have the financial means, you may want to consider leveraging the equity
in your current home to borrow enough for the full amount of your new home. This way, you can use your current home as an investment property and take out a mortgage on your new home.
While this can be an excellent path towards building your personal wealth, it can be
a stretch for many and needs to be considered carefully in light of your current and future financial commitments, as well as market forces such as price trends and rental yields. Some very careful financial calculations are involved, so before doing this, it may be worthwhile speaking to a financial adviser and an accountant, as well as your Smartline Adviser. There are added financial and taxation issues involved so you need to ensure you budget correctly.
Negotiating on price
Before you lock in a price, make sure you’ve spoken with your Smartline Adviser and are confident with your capacity to borrow. Your Adviser should also be able to arrange loan pre-approval for you.
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