So, you’ve come to a home builder like ANSA Homes and decided on your new dream home, but you still own your current dwelling. How can you transition from one home to the other while minimising the disruption and the cost for you and your family?
In short, you have two options – either sell your current home and rent or obtain a bridging loan to cover the interim period. There are a few things you need to consider before you decide on the best option for you and your family; such as the amount of time the new build will take and the physical distance between the two properties.
ANSA Homes provides certainty
Before deciding on the best option, you need to know how long the building of your new home will take. At ANSA Homes we deliver complete transparency throughout the building process, from timeline to costs to inspection to construction.
We’re able to achieve this by drawing on our wealth of home building experience to design an airtight procedure that delivers certainty of process for you. We take the time at the start of our relationship to get to know the real you and we ask questions and intently listen to your responses to understand your unique requirements for your dream home.
Selling first and renting
For most people, when building a new home, the ideal situation is to sell your current dwelling with the agreement that you can rent back the home at an agreed value. This assumes that it’s conveniently located and affordable to make this feasible. Assuming that your ducks line up, this option could provide you with fast access to capital while avoiding the expense and hassle of moving twice. It also skips the hassle of changing other life necessities like your mailing address, schools, and more.
This option might work for the buyer of your existing home if they’re investors, but if they want to live in their new purchase you will have no choice but to move out.
The other rental option is to move into temporary leased accommodation while your new home is being built. In some cases, this might be the best choice because you can move into your new area straight away if you’re relocating from your existing area. Obviously you will need to factor in the rental price, moving costs, possible storage costs, and be prepared to be a little disrupted in the interim period. But the reward at the end of the period – a brand new home for you and your family – will be well worth it.
In simple terms, a bridging home loan bridges the financial gap between two home loans. Bridging home loans are commonly used to finance the purchase of a new property while your current property is being sold and can also provide finance to build a new home while you live in your current one.
Typically, the lender takes security over both properties and lends against these properties until the sale and purchase process on both is complete. Often during a bridging loan period, your home loan will generally be charged as an interest-only loan and many lenders offer interest rates comparable to the standard variable rate, or slightly above.
You need to negotiate the best deal for your situation. Some lenders, for example, will give you six months to sell your home if you’re buying an established home and up to 12 months if you’re building.
Once you sell your first property, the funds from the sale are applied to the bridging loan, and any remainder can be rolled into a new home loan.
Obviously, you need to sell your original home, which can take some time, so you need to factor that process into your cost estimates and decision making.
Certainty of price
When you receive a tender from ANSA Homes for your new home, you can be certain that the price presented in this tender, will be the final price you pay for your home. That’s the ANSA Certainty Promise, from us to you.