Pink Finance

Whether it is to relocate or renovate there are many different questions that you may have. Pink Finance consultants will listen to what your plans are and will find loan solutions to match.

 

I am about to relocate – what do I do first?
What is Bridging Finance?
Costs associated with your relocation
I am thinking of renovating. What do I need to do?
Costs associated with your renovation

 

I am about to relocate – what do I do first?

If you are about to relocate, ideally you would have sold your home first. Try arranging a longer settlement term on the property you are selling so that you have enough time to find a property that fits your criteria. By doing this you will know what funds you have available for your relocation

Pink Finance realises that sometimes this does not always happen. So what do you do then? Bridging Finance may be an option and your Pink Finance consultant will discuss if you fit the strict criteria that Bridging Finance requires.

If Bridging Finance is not an option, negotiating an extended settlement before you exchange on the property that you would like to purchase will give you time to sell your exiting home or arrange for settlement to occur simultaneously.

If you have sold your property and have not found another one to move into, you may need to rent – this can only be a short term strategy to ensure you find a property that is perfect for you.

Pink Finance will check your situation to make sure you have enough deposit to cover all the costs.

 

What is bridging finance?

Bridging finance is required when there is a period of time that you have loans on two properties – one you have just purchased and one you are trying to sell. Whilst interest rates are usually at the standard variable rate, it can be very costly in other ways. There are two ways that a bridging loan can be structured.

• Pay the debt (usually interest only) on both properties at the same time. This may not be feasible and can be a very stressful time trying to satisfy the debt of two properties.
• You do not make any repayments during the bridging period but the interest on the mortgages of both properties (peak debt) is added to the loan amount (interest capitalisation). This will increase the end debt of your mortgage once you have sold your existing property.

Your Pink Finance consultant will assess your situation to see if bridging finance is an avialble option for you.

 

Costs associated with your relocation

In addition to the costs associated with your purchase, there are additional costs associated with relocating:

• Removalists – this will depend on how much furniture you have to move but is wise to get a series of quotes as prices can vary dramatically. There are features as well such as packing and delivery which may save you time but of course cost extra.
• Storage – If you are selling your home, you may want to de-clutter your home to make it more presentable, possibly leading to a higher sale price. You may need to pay for storage during this time. If you are renting for a short period of time, you may pay storage for some of your furniture so that you do not have to move it in and out of properties more than necessary.
• Agent fees – Real estate agents will charge a fee for selling your home. Make sure you take this cost into account when calculating expected funds available after you sell your property.
• Peak Debt (bridging finance) – The peak debt is when the combined loans on your properties are at their highest. This occurs prior to the sale of your existing home and you often pay interest only at this time.
• End Debt – This is the calculated debt you will have at the end of the bridging period. This may include capitalised interest accumulated prior to the sale of your property. During the bridging period you may not be obliged to make any repayments.

 

I am thinking of renovating. What do I need to do?

Given the costs associated with relocating, renovating may be an option that is more economical for you. Home improvements and renovations are becoming increasingly popular for this reason – to avoid those extra fees and costs.

Pink Finance can help you obtain the finance for your renovation. The type of loan that will suit you will depend on the extent of your renovation. If the renovations are extensive, (such as adding a new level to your property) you may need to obtain a construction loan. If they are minor renovations such as adding a pool, pergola, kitchen or bathroom you may simply be able to obtain an additional loan or line of credit which will cover the costs. The options and structures will be based on your current position and the equity you have in your current home. Banks may also consider the end value of your home after the renovations are complete.

Your Pink Finance Consultant will be able to discuss which loan options are suited for you.

 

Costs associated with your renovation

Apart from the actual construction itself, additional costs that may apply include:

• Architect Plans – You may or may not require an architect for your renovation. Generally a larger renovation will require an architect. For a renovation that requires a construction loan you will need to have a Fixed Price Contract. This is a contract which details the costs and extent of your renovation.
• Council Approval – If the renovations are extensive and alters the external appearance of your home, you may need to apply for council approval. There will be a fee for this and each council has different regulations as to when you need council approval. It is imperative to check with your local council to see if obtaining council approval is necessary for your renovation. If you do a renovation that requires council approval and you have not obtained it, they may put restrictions on your property which prevents you from selling the property in the future.
• Construction Loan costs – If the renovations are extensive and you need a construction loan, there will be some additional loan costs. Multiple property valuations may be required depending on how many stages there are to your renovation. Many fixed price building contracts require progress payments to the builder at each stage. These loan draw downs may incur a fee. You only pay interest on the portion of the loan you have drawn down.
• Demolition Costs – The demolition costs may not be included in fixed price contract. The costs will vary depending on the extent of demolition required. Make sure you have taken this into consideration when applying for your loan.