Buying another property: an overview
Whatever your reason for buying again, a lot might have changed since you bought your first home. Your financial circumstances may have changed or the lending criteria for finance might be different.
In this video, our CEO and Founder Patrick Cranshaw will share some of the most common questions asked by those applying for a mortgage when buying your next home and the various ways they can receive assistance from a mortgage broker Brisbane North.
Should I Buy A Second Home?
Most of our clients, who are needing a mortgage to buy second home are looking at upgrading and they are looking for ways to lean into the next purchase.
Questions we are asked by homeowners looking at buying a second home are:
If you are wanting to hold on to your first home while buying another property – you may want to buy an investment property or buy a holiday house – there are many reasons why people would seek to finance second home.
Your personal circumstances and finances will determine what you are able to do when buying a second property.
Chat to us as early as possible in your decision-making process and let us help you understand everything you need to know for financing for second home, whether you want to keep your first property or you are looking to sell the first and buy your next property to live in.
Need more space
Most people buy another home when they start outgrowing their first one. This happens when the family grows bigger, grandparents want to be near their grandchildren, or they need different property features such as a bigger backyard.
Upgrading to a better home
People also buy a new, upgraded home and they either sell the first home, or they might keep the first as an investment property to rent out.
You or your partner may have to relocate for work-related reasons. Perhaps your current home is too far that a daily commute becomes a hassle.
Your kids may have moved out so you don’t need the extra space now. Retirement is also a reason many people downsize and purchase a smaller home that is easier to maintain.
Living in one home, and buying another to serve as a rental property investment.
A holiday home to escape to from time to time is also a common reason people choose to buy another property.
Financing Your Next Home
Buying your next home can be a really exciting process, but it can also be more complicated than buying your first home. Are you wanting to keep both properties? Will you be buying first and then selling your current home? How do you finance that process? Are you selling your current home first and living elsewhere while you buy the next property?
Buying your first home is often a very straightforward process, but buying your next home and figuring out how to finance the purchase of second property can feel overwhelming for many homeowners.
This is why it makes so much sense to partner with an experienced team of brokers for when you are looking at financing for second home. Our knowledgeable mortgage brokers will be able to talk you through the entire process step-by-step, ensuring that nothing is overlooked along the way. We’ll be able to discuss your current situation, your future financial goals, and which mortgage products would be most suitable for your needs.
Offering tailored advice, coupled with prompt and professional service, North Brisbane Home Loans is the ideal choice for homeowners in Brisbane looking to buy their next home. Contact our friendly and professional team for a free consultation on a second home mortgage or buying your next home!
Are you in a good position to sell your first home and buy another — or vice versa?
To sell or not to sell — that is the question. Financing your next home requires a lot of consideration. There are many paths and outcomes to choose, so we have broken down the advantages and disadvantages of selling before buying, and buying before selling.
Advantages of selling before buying
- Knowing exactly how much you can put towards your next home purchase
- Having enough time to choose which property you want to buy and be happy with the sale price of your first home
- No need for a bridging loan or complicated finance processes when trying to buy first without a cash deposit
Disadvantages of selling before buying
- The value of the property you’re selling might go up after you sell
- Missing out on your dream home for the right price because you first home is still on the market
- Finding a buyer faster than finding a property to move into and buy, which could mean additional spend on temporary housing
Advantages of buying before selling
- A rising market that can help you make more from your home sale or get a good property for a lower price
- No rush finding a new house to buy
- Not having to move into a temporary housing and spending more on rent and moving fees
Disadvantages of selling before buying
- Not having money ready from your first home sale for a deposit for second home
- Needing a bridging loan (and dealing with a higher interest rates) that you have to repay within 12 months to finance second home
- Potentially having to make a higher bid on a property you’re buying while you sort out your financial situation
What are the Benefits of Using a Mortgage
Broker When Buying Your Next Home?
When you are looking to buy your next home, finance can get complicated. There are many good reasons to use a specialist mortgage broker. Here’s a list of the best 5 benefits of using a mortgage broker North Brisbane that you can get when buying your next home in Brisbane.
Help to comply with lending criteria
Since you bought your first home, lending criteria may have changed. Don’t leave it to chance by applying directly to the lender and risking your application being declined at the wrong time. Expert mortgage brokers deal with a range of financial situations and lending criteria every day. Financing another home can be more complicated than a first home buyer loan or refinancing to renovate. Because of this, it’s worth getting advice from a mortgage broker who has experience in securing finance for a next home. At North Brisbane Home Loans, our brokers understand complex lending criteria and can guide you through the entire lending process.
Minimise lending fees
By working with an experienced broker, you can ensure you won’t get hit with unnecessary and unexpected fees. When comparing loan products, we won’t just look at interest rates and loan features – we’ll compare the total loan product, including any ongoing fees or upfront charges. We’ll also look at any alternative options available to you.
You’ll get the best finance solution to suit your needs
Your current bank or mortgage lender may be able to assist you with financing your next home – but that doesn’t necessarily mean it will be the best solution for your specific needs. North Brisbane Home Loans has access to a wide range of lenders and home loan products, meaning you’ll have a better selection to choose from when buying your next home. These could include products that offer interest-only repayments, the ability to make additional repayments in the future or access to an offset account or redraw facility. Mortgage brokers are legally obligated to work in your best interest, the bank is not.
Access to local industry knowledge
With over 100 years of combined experience, our brokers have an intimate understanding of the Brisbane mortgage industry. This includes any special deals on offer, which lenders are most likely to approve an application when financing a next home, and what kind of loan features will be most beneficial for a borrower in your situation. As long-time residents of Brisbane, our brokers can also recommend reputable local businesses to assist with other aspects of your property purchase, including conveyancers, pre-purchase inspectors, builders – even movers and cleaners for once the sale is finalised.
The reassurance of knowing your best interests are being put first
Working with an impartial mortgage broker means that you can trust the advice you’re being given for your situation. Not only do North Brisbane Home Loans abide by the Australian ‘Best Interests Duty’ policy, but we also take pride in our reputation for offering trusted advice and excellent customer service. As accredited members of the Mortgage and Finance Association of Australia (MFAA), we’re determined to achieve the best possible outcome for our customers.
Do you really need to buy a second home?
Is buying a second property really a necessary step for you at the moment? If you are planning to purchase one so you can have it rented, you will definitely be giving yourself access to extra cash flow and other benefits. However, there are also a host of potential issues associated with the next home purchase. Below is an outline of the pros and cons of buying rental property.
Buying A Second Home As A Rental – Pros And Cons
7 Tips For Buying Your Next Home In Brisbane
Here are the top 7 tips for buying your next home in Brisbane that will help to make the whole process as simple as possible.
1. Use a Local Brisbane Mortgage Broker
With online appointments and the ability to send documents electronically, you may feel that the location of your mortgage broker is irrelevant. But choosing to work with a local Brisbane mortgage broker ensures you’re partnering with someone who is familiar with the Brisbane property market and who has established contacts with local businesses (such as pre-purchase inspectors and property conveyancers). A local broker will also be on hand and readily available to assist with any issues that may arise before, during, and even after settlement of the new property has been finalised.
2. Consider Which Mortgage Features are Right for You
Before you decide on a home loan product it’s important to consider what your short and long-term financial goals are and whether or not your mortgage has the right features. For example, are you planning to start renovations in the next few years? Do you want to pay off the loan as soon as possible? Would an offset account be useful in lowering interest repayments? Planning in advance will allow you to choose a home loan product that includes the right features for you.
3. Plan Ahead to Maximise Your Borrowing Capacity
Before you move ahead with applying for your next home loan there are some simple things you can do to potentially improve your borrowing capacity. These include:
- Making additional repayments on your current mortgage to increase your equity.
- Complete any needed property repairs to improve the value of your property.
- Obtain a copy of your current Credit Report to ensure everything is up to date and in order.
- Pay off any lingering personal debt, such as high-interest credit cards.
- Talk to a mortgage broker to see if there is anything else you should be doing.
4. Have a Realistic Budget
Before you get started with house hunting again, it’s important to know exactly what you can and can’t afford. Start by completing a detailed written budget of your current living expenses. Next, make a list of all potential purchase costs, including conveyancing fees, pre-purchase inspections, and transfer duty costs. Work out how much of a deposit you have to offer, either as cash savings or in the equity of your current home. At North Brisbane Home Loans, we can help you with this process to work out how much you can afford to borrow.
5. Invest in a Pre-purchase Property Inspection
Buying a second property, whether you are moving in or using it as a rental, is a huge investment, so it’s well worth organising a pre-purchase property inspection just like you would have as a first time buyer. A pre-purchase inspection ensures that any major structural issues, water leaks, or pest infestations (such as termites) are discovered before the sale is finalised. Not only does this give you peace of mind about the property you’re buying, but if the inspection identifies any issues then you’ll be in a stronger position to negotiate on the final purchase price.
6. Do Your Research
Before you commit to buying your next home it’s a good idea to do thorough research. To help you get started, we’ve put together ‘A Buyer’s Guide To Home Loans Brisbane’ which includes helpful information on the Brisbane property market, real estate purchase considerations, and a list of top 10 suburbs for property investors to consider.
7. Use a Mortgage broker You Can Trust
Talking to a trusted mortgage broker can reassure you that you’re getting the right home loan product to suit your unique circumstances. With over 250 online reviews and a 5.0 star customer rating, North Brisbane Home Loans has an established reputation as a mortgage broker you can trust. To ensure your best interests are always put first, make an appointment with one of our dependable brokers.
At North Brisbane Home Loans, our team is committed to providing the best mortgage broker service for next home buyers.
How To Get A Home Loan For Your Next Home
Sure, you’ve already done this before, so it is just a matter of giving yourself a refresher course and making sure you qualify for your finance a second time round, right?
The lender will assess your buying capacity based on what you earn (e.g., income, investments, rental income, government income), what you own (e.g., savings, valuable personal assets), and your debts (e.g., credit cards, loans).
Just like when you bought your current home, to apply for a mortgage on your next property, you will need the following documents as proof of identification:
Current driver licence
Council rates notice
Credit or debit card
At North Brisbane Home Loans, the application process for next home mortgage loans usually look like this:
Chat with one of our mortgage brokers so we can evaluate your current financial situation and identify the best course of action in obtaining finance for your next home purchase.
We will reach out to you within days after our first chat and inform you of your loan options from our panel of lenders.
Once you have chosen your mortgage product from a lender, we will prepare and submit your loan application to your lender of choice for approval.
After getting approved for finance, we will help you have a seamless transition with everything from arranging a property valuation to formal approval and help with booking your settlement.
It’s official! On settlement day, our team will help coordinate all stakeholders to ensure your purchase is completed without delay.
Why Choose North Brisbane Home Loans?
5 Star Customer Rating
We put you first and genuinely want to help you achieve your property ownership dreams.
Being a top rated first home buyers mortgage broker in Brisbane we delivered the best home loan for first home buyers. We have hundreds of happy customers, find out what they’ve said about working with North Brisbane Home Loans here.
Experienced Mortgage Brokers
With more than 90 years’ combined experience in the industry, our first home buyer mortgage broker can confidently offer you the best advice when it comes to finding the best value loan for you.
We are a team of experienced mortgage brokers in Brisbane that helps to get the best home loan for first home buyers.
We Work For You – Not The Banks
We don’t charge any fees for our first home owner loan services, our commission comes from the lender.
As a personal first home buyers mortgage broker in Brisbane, we’re by your side every step of the way to ensure you select the best first time home buyer loan product for your individual circumstances.
Exclusive Partner Network
Not only do we provide you with the best advice on first home owners loan needs, but we also introduce clients to our network of trusted partners offering discounted rates.
Save time and money searching for reliable building and pest, real estate agents, solicitors and more.
5.0 Star Reviews from
Next Home Mortgage Loan Customers
5.0 STAR REVIEWS
Contact North Brisbane Home Loans
If you’re looking for a next home mortgage or investment home loan, the experienced mortgage brokers at North Brisbane Home Loans can help find a tailored loan solution for you.
Contact our professional and friendly team of second home mortgage brokers today!
FAQ For Buying Your Next Home
Should I buy a second home?
A second home in a region with a robust housing market is a great investment opportunity. Properties generally appreciate in value over time, and you may profit from your second home should you put it up for rent or choose to put it on the market in the future. However, only take this leap if you are financially ready and have spoken to a trusted mortgage broker.
How can I get a home loan for my next property purchase?
You will need a professional to help manage your funds and liaise with your current and new lender. We recommend talking to a mortgage broker North Brisbane for expert advice, formal assistance, and access to all the best home loan products.
How much of a deposit do you need when buying your next home?
Most lenders will require a borrower’s deposit of at least 5-20% of the total property price. So, if you’re buying a property that is worth $395,000, you’d need a minimum deposit of $19,750 (5%). But keep in mind that if you’re borrowing more than 80% of the purchase price, you’ll also need to factor in the cost of Lender’s Mortgage Insurance (LMI). To avoid LMI when buying a second property you’ll need to have a 20% deposit available.
What kind of loan should I choose for my next home purchase?
There is no “one size suits all” option when it comes to home loans. There isn’t even a “one size suits most”. This is why it makes sense to talk to a broker before applying for any finance. At North Brisbane Home Loans, we take the time to talk things through, do the research and compare suitable loan products before we start making recommendations to our customers. So, our clients can rest assured they’ll get the right home loan product to suit their needs.
How does a bridging loan work?
Unlike a standard mortgage which is paid back in instalments over 30 years, a bridging loan is designed as a short-term stop-gap measure. The length of a bridging loan is typically
maximum 12 months in total since it is designed to be paid off in full as soon as your first property is sold. Since bridging loans are available with interest-only repayments they can make it easier to manage two mortgages during the interim period between buying and selling.
Can I use the equity in my current property as a deposit to finance my next home purchase?
If you have built up equity in your current property, then this can be used as a deposit on the purchase of your next home. How does equity work? Well, imagine you previously purchased a property for $250,000 and after 10 years you’ve reduced your mortgage balance down to $160,000. But during those 10 years, the value of your property has also gone up by an estimated $120,000. This means that you now owe $160,000 on a property that is worth $370,000. As a result, you now have $210,000 in equity, which you can use as a deposit to secure your next mortgage.
What are the pros and cons of accessing equity?
Using the equity in your existing property comes with various pros and cons, so it’s important to consider all the ramifications in detail before you make a final decision. For example, accessing the equity in your home will increase your debt, could take longer to repay and may lead to higher repayments. However, accessing your equity can put you in a stronger position as a borrower. If your cash deposit is less than 20% of the purchase price, then accessing your equity could save you from paying Lender’s Mortgage Insurance. A higher deposit (thanks to equity) may also mean that you’re eligible for a better range of products, which could result in future savings.
Can I get an interest-only loan when buying my next home?
Some lenders will offer interest-only loans to borrowers who are looking to finance their next home. This means you’ll only have to make repayments on the interest accrued and not on the amount that was borrowed (referred to as the ‘principal’). The interest-only period will only apply for a set time (usually 1-5 years), after which you’ll be required to start making repayments on both the principal and the interest portions of the loan. This sort of loan can be beneficial for next home buyers who want to purchase an investment property in Brisbane or who are planning to sell their current home only after they move into their new home. For more information on interest-only loans and whether or not they may suit your circumstances, talk to one of our experienced brokers.
What other buying costs should I be aware of?
When you’re planning to buy a second home it’s important to factor in all of the costs, not just the property purchase price. This could include conveyancing fees, pre-purchase inspections, stamp duty, loan application fees, council rates, and the costs of relocating to the new property (this is particularly important if you’re moving to a new area).
How much can I borrow for my next home purchase?
The total amount you can borrow will depend on your current financial situation, including your assets, expenses, and employment situation. You’ll also need to consider how much of a deposit you have saved or how much equity you have built up in your current property. For an estimate on how much you can afford to borrow, try using our free online calculators, or for a more detailed assessment, make an appointment with one of our brokers.