In order to able to save yourself from the pitfalls of financial burden, you should read on this article to get the most valuable tips when you’re planning to upsizing your home, especially for the people who new on property investment field;
1.️ Never making an impulse decision on property purchase
Since you have a property and plan to sell it off in the future, it is best to make a right and well-thought-of decision before moving out. Normally, upsizing your property is done with the purpose of living there for a period of time and so you should think about something long-term. Is this house suit to your living style or your family? For example, you should not choose to live in the area just because its nearby your kids primary school as your kids will graduated from their primary school after 6 years.
2.️ Think about something long-term
If you have got promoted or got increased of your salary so you decide to upsize your home? But, we need to tell you that this can be a huge matter since you will take on more debts as you need to pay for a bigger mortgage loan.
Most of the people like to upsize their home or a big budget renovation as soon as they got financially comfortable. In fact, you just make yourself become financially uncomfortable again as you are taking on more debts as well as affect your retirement funds.
3.️ Do check on your housing loan eligibility
Before you go for house hunting, the first thing you need to do is check on your housing loan eligibility. Besides, you should also check your credit report to see whether you have any debts that you aren’t aware about and check whether there is any incorrect information or recorded.
4.️ ️Never forget your financial status
Different banks will approve your loan at different rates after assessing your financial status. The main thing they will look at is your Debt Services Ratio (DSR), some of the banks will letting you to borrow a large amount of loan and some of the banks just borrow you a little. This is depends on their determined DSR threshold. So, it is advisable to get a pre-approved mortgage loan before your go for house hunting as you will estimate how much loan you can borrow from bank.
5.️ Mind of the entry costs and the miscellaneous
Apply a mortgage loan is consist of entry costs such as stamp duty, legal fees, agent fees, deposit & etc and miscellaneous cost such as renovation, furniture and other existing costs. Before apply a loan with the bank or even decide to buy a house, you should consider whether you have enough savings or cash to pay all of the costs during the process of house purchase.
6. Never forget to settle your current house first
Once you think your current financial is much more comfortable than before, you will consider to move to a new or bigger house. But firstly, you should settle your current house, sell it or rent it, either one. No matter what decision you have made, you should keep your current house in good condition. It is matter as it will affect the sale value and rental income.
Lastly, remember, once you have decide to upsizing your home, you will need to think something long-term, well-thought-of decision making, check your eligibility and affordability, the entry costs, and settle your current house before it becomes your burden.