BUYING your next home can be daunting and sometimes the process is not made simpler when you are also trying to sell your current home. However there are some basic rules that can help you avoid many common and costly errors.
To avoid not only financial problems but a lot of stress, it is highly recommended that you sell your existing home before purchasing another. Here are some reasons why;
It lets you know exactly how much you can spend on the new home without stretching the budget too far.
It helps you realise the full potential of your current home by allowing you to get it market ready for sale.
It doesn't force you into accepting offers and underselling your current home.
Your current home is Capital Gains Tax free so every pre tax dollar saved is a dollar earned.
If you do decide to buy before selling your current home and the settlement dates don't match up, all is not lost. The simple answer is a bridging loan, this is a short-term loan using your current home and equity as collateral. The interest rate with this is slightly higher than the normal rate however it does help you out until your current home is sold and settled.
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