At Prosperity Finance, many people call us to discuss their ideas for upgrading their homes, buying new investment properties, or other mortgage-related matters. But some of them aren’t aware of how they can make the most of working with a mortgage broker. A professional mortgage broker should not only help you work out how much you can borrow, but they should also adopt a strategic outlook to help you make informed decisions. So, when clients approach us, they often say: “I will contact you when I’m ready.” But what if by the time they are ready it’s already too late?

Have you ever thought about upgrading your house? Planning to sell your home and buy another can be both exciting and nerve-wracking. You might not be sure where to start. It’s very hard to sell and buy a home at the same time. So, should you sell your home to get some cash before you search for your new home? Should you buy a new house before selling your current house? Or should you approach your mortgage broker and get personalised options prior to selling your existing house?

When it comes to selling and buying property, there is never a single, nor a simple answer. That’s why, in this week’s blog, we demonstrate the various scenarios that can occur when you involve a mortgage broker at different stages of the selling, buying or upgrading process. 

When clients say: “I’ll contact you when I’m ready.” Why you shouldn’t wait until it’s too late.

Video Timeline:

1. How do you ensure you don’t miss out on the opportunity to buy a new house after selling your current home? – 00:42

2. How did we help our client upgrade his home by selling his current house first? – 01:31

3. How did we help a client buy an investment property which was far beyond his expectations? – 04:18

1. How do you ensure you don’t miss out on the opportunity to buy a new house after selling your current home?

Scenario One

Client A decided to sell his existing home intending to upgrade to a better house. He decided to sell first because he wanted to avoid having to cover two mortgages at once.

Unfortunately, Client A didn’t approach us until after he sold his existing house. Based on his current situation, we calculated how much he could borrow for his new home. However, once we added the cash he received from the property sale, the amount he could afford to spend on purchasing a new property was far below his expectations.

If client A had approached us before selling his existing house, he could have sold his house at a higher price to get more cash, or he might have decided to keep his existing house as an investment property.

2. How did we help our client upgrade his home by selling his current house first?

Scenario Two

Client B approached us when he decided to upgrade his home. We gave the client some options based on his current situation, explained how it would work and what he could expect. This helped Client B step up to his new home with confidence.

Based on this client’s situation, we recommended he sell his existing home before buying the next one. To ensure he could afford his ideal house, we calculated a reserve price on his existing home. Also, we suggested that he did not sell his home unless the reserve price was met.

In the meantime, we helped the client top up the amount of $70,000 from his existing home. We did this to ensure he would have a sufficient deposit to secure his new property.

Selling his home didn’t go as smoothly as he expected. His house was not in a good condition, due to the plaster walls, and even though he engaged a sophisticated real estate agency, the selling price did not reach the reserve.

Whilst he was in the process of selling his home, we kept in close contact with him. Over time we adjusted our strategy and helped the client work out how much he could afford on his new house, based on the sale price given by the potential buyers of his existing house.

Eventually, the client decided to sell his home at a price below the original reserve, after discussions with us. But he felt relieved because he avoided losing potentially much more on this property if he had decided to keep it.

 

3. How did we help a client buy an investment property which was far beyond his expectations?

Scenario Three

In contrast to Client A and Client B, Client C planned to buy an investment property, rather than upgrade his home. Like many of New Zealand’s first-time investors, the client had some basic knowledge about property investment and a desire to climb the property ladder. He wanted to generate passive income from his investment property and pay off his home loan faster by using equity from the investment property.

The client’s existing home was in Remuera, Auckland. The estimated value of this house was $1,600,000. Before the client approached us, he had been told by another New Zealand mortgage broker that he could only afford to buy another investment property with a price between $400,000 and $500,000.

Not only did we calculate how much he could borrow based on his current situation, we also considered why he wanted to buy an investment property. After discussing his intentions, we suggested that he could sell his current home and buy a new home in an area where the house prices are lower than Remuera. We did some research, asked for opinions from our professional networks, and found he could spend $1,200,000 on a new home in a different area, yet still enjoy a similar lifestyle. Therefore, we helped Client C increase the amount he could spend on an investment property. He could achieve his goal of buying an $800,000 property, which was far beyond his expectations.

In a nutshell, we highly recommend you get in touch with a professional mortgage broker before you make any major decisions. Whether you are thinking about upgrading your home, buying an investment property, or other mortgage-related matters, your mortgage broker can hold your hand every step of the way. At Prosperity Finance, we not only help you work out how much you can borrow, but we adopt a strategic outlook to empower you to make informed decisions. 

Disclaimer: The content in this article are provided for general situation purpose only. To the extent that any such information, opinions, views and recommendations constitute advice, they do not take into account any person’s particular financial situation or goals and, accordingly, do not constitute personalised financial advice. We therefore recommend that you seek advice from your adviser before taking any action.

Prosperity Finance – here to help

We are professional mortgage brokers and are here to hold your hands through each step of the process. Give us a call today on 09 930 8999.

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