If you’re in this situation right now, you will have to decide between buying a new home and upgrading your current home. To help you with your decision, here are some points to consider:
Choosing this route will involve hiring a real estate agent and paying their fees. They will work with you in selling your old house from advertising your house to finding prospective buyers. They will be the ones to advise you on how much they can sell it for.
As well as the agent's fees, you will need to pay a conveyancer or solicitor to transfer the property’s ownership to the buyer when your home is sold.
Buying a new home will also involve paying stamp duty. Other fees will include pest and building inspections, legal fees, lenders mortgage insurance if you’re borrowing more than 80 per cent of the purchase price, loan fees, and moving fees.
Deciding to upgrade your home can mean that you’re going to increase your equity in the house. However, a common risk when doing a home renovation is overspending. It is not unusual for builders to underestimate the cost of a renovation by missing problems your house has such as structural or wiring problems.
That’s why getting a building inspection beforehand is important so you can judge if your house is capable of being renovated. You will also need to get a property survey to check if you’re building within the boundaries of the property, and to see if you’re getting in the way of any existing easements.
Council regulations are another thing to think about. You may need to apply for an approval from your local council and in some cases, from your neighbours. Moreover, you may need to move out of the house and rent. So you’re paying rent, mortgage repayments, and the renovation costs all at the same time.
Whether you’re planning on renovating your current house or buying a new home, examining your finances first is important so you know what you can afford. Both are major decisions and expensive so it’s best to do your research by talking to experts, requesting quotes and getting detailed costing information.
Other helpful resources:
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