I work in the city and it takes about 1 hour and 20 minutes to get to work… painful. My property would be around $1.3m and the mortgage is about $900k and I’m thinking of selling my home and buying in the eastern suburbs or inner west. A couple of friends have suggested renting first for 6 months before buying and selling. The travel is not getting any easier and I’m hoping to get some advice on other options in relation to bridging finance or other things to consider?

Hi Judy,

I hear you!

Renting first is a great idea, especially if you are not familiar with the new suburb and a lot of people are opting for that before committing themselves to a big purchase.

Bridging finance is very simple and not expensive as it is common believe. You will have 6 months to sell your existing property whilst you are bridging and are not required to mak any repayments if you don't want to as interest will be capitalised and taken out at the end.

Happy to answer any further questions you may have .

do a budget on the cashflow for the time you are renting: I cant imagine renting close to the city is going to be cheap, and it needs to be funded from somewhere......also talk to your bank about what happens to your owner-occupied mortgage should you decide to move out and rent the house out to subsidise the cost of the rent.
And do a budget on the bridging finance: on a worse case scenario where you cant sell your home for 9 or 12 months.......then decide if bridging finance is cheap:)
good luck!!!
bc

Dear Judy,

Do you know how much the property you want to buy will be roughly?
Also, Would you like a 1 year bridging period or 6 month is enough?

This is necessary to see if you can get a bridging loan.

thank you

Hi Judy,

I agree with Umit, you are better off testing the new suburb by renting there as there is a lot of cost selling and buying.

In any case, if you want to have a bridging loan, you can in this case and interest can be capitalised on top of the existing loan until you sell the property if you happen to buy before you sell.

Alternatively, you can buy and have delayed settlement then put your property on the market and sell it. you then try to have simultaneous settlement for the sale and the purchase at the same time.

good luck.

Hi Judy,
I previously lived in Glenwood and based on your comment regarding time to get to work, I gather you are driving to the city given the time it is taking?
My office is in Baulkham Hills and when I need to go to the City I take the bus. I did that today and the trip was only 40 minutes each way. A single trip bus fare is around $5 compared to the tolls on the M2, Lane Cove tunnel and the Bridge.
Moving is going to put you back around $100,000, when you include agent's commission to sell your home, stamp duty on the next home and legal fees.
Maybe you could be a rentvestor. This is a person who owns a home which is retained as an investment (i.e. Glenwood), and then rents a home in a preferred area (closer to the city).
I have access in my office to a financial planner and an accountant and invite you to come in for a chat.
It pays to look at all the options.