What is the cost of upsizing?
Whether you’ve outgrown your current space, need room for a home office, or perhaps your family is expanding – upsizing your home can be an exciting time.
If you’ve ran out of space in your current place and you’re looking for a bigger house, upsizing could be the right decision for you. Whether you’re growing a family or a business, or just need extra space – upsizing can make a lot of sense.
When considering buying a larger home, there are a few costs that most vendors don’t consider before listing their property on the market. In this article, we’ll explain what those costs are – and how you can manage your finances throughout the move – without hurting your wallet.
Up-front costs to consider before upsizing
Some of the immediate costs you might face are real estate agent fees, the cost of marketing your property, stamp duty and in some cases, legal fees. Most vendors are surprised to learn the cost of marketing their property. If you’ve sold a home before, you may have even been asked to pay upfront before your property was listed on the market. Luckily, there are new ways to pay for real estate marketing that won’t hurt your wallet
Yourmortgage.com.au estimates that the upfront cost can take up to 7% of the property price – for example, there would be fees of approximately $28,000 on a property worth $400,000*.
Before purchasing your new place, you may have to consider costs such as:
- Transfer fee on the title
- Mortgage insurance
- Inspection fees
And once you’ve moved in, you’ll need to consider the following costs:
- Home & contents insurance
- Connecting your gas, water, phone, and internet.
The price you’ll pay in the long term
While there are many standard costs involved with selling a home, there are also some larger expenses that you might not be expecting. After all, moving isn’t always as simple as moving from point A to point B.
When upsizing, most people will have to rent between selling their current home and purchasing their new one. Whether you’re waiting for settlement to access your equity, or you couldn’t bid on your next place without financial certainty – the cost of renting should be considered.
This could also mean potentially paying removalists twice – once to move out of your current place and into a rental, and then from the rental to your new place. For most, this is an unavoidable cost.
Luckily, there is a better way to manage your next move.
Access the equity in your home today
Most home-owners are asset rich but cash poor. Despite years of paying off their mortgage, most people won’t have direct access to the cash they need to fund their next move. Our latest product, DepositNow, is designed to help people who are upsizing manage their cashflow throughout the selling process, by giving you access to the equity in your home before settlement happens.
You can apply for any amount between $30,000 and $250,000, so long as it is less than 80% of the available equity in your current property.
Did you know the average homeowner is asset rich, but cash poor?
Take Kylie and Brad, they’ve just secured a new, bigger family home, thanks to DepositNow. They had recently sold their property, and settlement was still 120 days away. However, they’d just seen the perfect property and wanted to get in and secure it quickly before someone else did.
Knowing that the bank had a long process to provide them with a bridging loan and that they didn’t quite have the deposit they needed. Kylie and Brad took advantage of having early access to the equity in the sale of their current property to bridge their cash-flow gap.
By accessing $72,000 early, they were able to cover their cash-flow gap, secure the new property by putting down a higher deposit and make payment on the amount borrowed at settlement of their old property.
DepositNow is designed to give people like Kylie and Brad early access to the equity that’s been locked up in long settlements, so they can get on with life.
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