Property Downsizers

 

Selling your home and downsizing can be a daunting process, especially when you’re letting go of your most valuable asset. At My Finance Consultants, we help you understand your finance options and manage the process for you, so you can downsize and unlock the equity in your home with confidence. Understanding your borrowing power and potential repayments is crucial when downsizing. Use our Borrowing Power Calculator and Loan Repayment Calculator to get a better idea of your financial standing.

How much will it cost?

One of the major factors in any decision to downsize is the associated costs. These include:

Navigating lender assessments

Over the years, many lenders have changed how they assess borrowers' income and expenses. What you can borrow now may be vastly different from when you first purchased your home. Before making offers or bidding at auctions, we strongly recommend consulting with your trusted Mortgage Broker. They will conduct a thorough financial assessment and discuss your current lending situation in detail.

Downsizing contributions

When you downsize, you might be eligible to make a downsizing contribution to your superannuation fund. This contribution can be made from the proceeds of selling your home, subject to certain conditions set by the Australian Tax Office (ATO). It's a great way to boost your retirement savings while freeing up equity from your property.

Why choose My Finance Consultants?

We do all of the legwork

We compare hundreds of home loan options from a wide choice of lenders, including the big banks and specialist lenders. We handle every step, having a thorough process in place to qualify you with our lender panel to find the most suitable lending options for you. We organise all of the required paperwork, order lender valuations, liaise with your real estate agent and conveyancer for a smooth transition to settlement.

We provide a convenient service

Mortgage Brokers save you the time and hassle involved in applying for a home loan - from application through to settlement. We'll meet at a time and place that best suits you, to establish your needs and preferences. We then do all the research and running around to manage every step of the application process. This saves you shopping around - as we do it all on your behalf.

We provide professional advice

We are fully trained, and accredited with every lender we represent. We are full members of the Mortgage & Finance Association of Australia and we have many years of industry experience. We also have a number of consumer protection initiatives in place to protect you - our valued clients. As mortgage professionals, we seek to guide you through the lending process to help you make better financial decisions.

We help you select the right home loan

Our first priority is helping you select the home loan that’s right for you, now and into the future. Your Mortgage Broker will save you the time and hassle associated with shopping around for a home loan, they will also guide you through the home lending process to help you make better choices with your personal finances.

We will always try to save you money

We use comprehensive software which helps us pinpoint the most suitable and competitive home loan for you. Typically, our service can help cut the current interest rate you are paying as well as reduce your fees and monthly repayments. Using a Mortgage Broker is also a great way to figure out a strategy to maximise your borrowing power.

We don’t charge you a fee for our service

There is no charge to you for our services because the lender pays us a commission once your loan has settled. We do charge a commitment fee for home loan pre-approval applications, however we will refund this to you upon settlement of your home loan. We will always aim to provide a trusted, friendly and professional mortgage broking service.

Our clients have been saying some great things about us!

Whatever your goals, a competitive home loan will get you there faster!

Whether you're a first home buyer, upgrading to your next home, getting into property investment, or wanting to refinance and pay off your existing home loan sooner, we can help you make the right decisions and stay on top - whatever your home loan needs.

We'll compare more than 40 leading banks and lenders, as well as hundreds of home loan options to find one that's right for you. No matter what kind of mortgage you're interested in, you'll enjoy expert home buying and lending advice from a Mortgage Broker you can trust.

Our industry knowledge and sophisticated mortgage software allows us to assess and compare the hundreds of home loans that are available in the marketplace, we will calculate your borrowing capacity and identify which lenders you will qualify with.

If you're ready to start your home loan journey, give our friendly team a call on 1300 381 955 or visit the Book Appointment section on our website.

FAQs

  • When downsizing, the key considerations of available deposit and borrowing capacity to determine your property budget are still relevant. However, you will also need to consider:

    - Whether you need or want to keep a loan after downsizing.

    - The timing involved if you are selling your current home and buying your new home at the same time.

  • Most clients downsize to close out their loan completely and create additional funds for retirement, alongside enjoying the lifestyle benefits of a smaller property. You may still need a loan after downsizing if:

    - You want to hold onto the proceeds from the sale of your current home rather than paying down the loan.

    - The proceeds from the sale are not sufficient to completely close out your current loan.

  • Yes, banks will consider your age when assessing your loan application. If you are still working and mid to late in your career, banks want to ensure you can pay off the loan during your working life without financial hardship. You will need to demonstrate an exit strategy for paying off the loan upon retirement. If you are above a certain age, usually 61, banks may apply a ‘retirement rule’ which includes:

    - A lower Loan to Value Ratio (LVR)

    - Demonstrating loan servicing from recurrent income only, such as rental income or dividends from shares

  • An exit strategy refers to how you intend to pay off your home loan upon retirement. Viable exit strategies include:

    - Paying down the loan through extra repayments from your income

    - Selling shares or other assets

    - Using your superannuation

    - Selling a business

    - Downsizing your home (if not already done)

  • A bridging loan is a temporary loan for a 6-12 month period that allows you to settle on the purchase of your new home while waiting for your old home to sell. The bridging loan is closed from the proceeds of the sale of your current home, leaving you with a residual loan or “end debt” to repay. For more details, please see our page dedicated to Bridging Loans.

  • Loan portability, also known as “security substitution,” is a feature that allows you to keep your current loan in place but swap the property used as security. This feature is useful in downsizing if:

    - You cannot demonstrate borrowing capacity to support a loan for your next property.

    - You are happy to sell and settle your current home first.

  • Generally, there is no capital gains tax on a home that has always been your principal place of residence. However, you should seek advice from your accountant to account for your unique circumstances.

  • This depends on your specific scenario. We will assess your income relative to the new debt you will take on and advise you of your borrowing capacity during our assessment process, factoring in any exit strategies or retirement rule considerations.

  • Yes, we strongly recommend seeking a pre-approval before making an offer on your new home. This allows you to negotiate with confidence and informs you upfront if the bank will approve a bridging loan if needed. A pre-approval typically lasts for 6 months, after which you will need to resubmit your loan application. At the 3-month mark, you must provide updates to the bank, such as new pay slips and confirmation of no changes to your financial position.

My Finance Consultants can help you achieve your goals. Send us a message. We’ll explain things in a way that makes sense & set you up for success!