The answer is a definite, likely YES and a clearly possible NO! Confused?
In other words, it depends on your situation. At LoanPlanners SA we have had lots of our clients in this situation over the years and we know that there isn’t an answer that fits all possible situations.
Often, it’s a simple thing to arrange, just set up the new loan, allow some time to sell the old home, and Viola…the job’s done. However, that isn’t always how things go and provisions need to be made so that you as the client are protected from doing yourself real financial damage.
For instance, some time ago I met a person who had been assured by an Estate Agent that his home would be easy to sell at x thousand dollars. On that basis, he offered to buy another house through him assuming that most of the necessary funds would come from the sale of his house.
By the time settlement was due for his purchase, he hadn’t even have an offer on his house, and it was then that he discovered that he was ineligible to borrow any more money than he already owed.
In the end, he had to pay accumulating penalty interest to the vendor he bought from, while he tried to sell the place he had just bought because it was easier to sell than his old one. It was a horror story for him. It ended up costing him tens of thousands of dollars, and the estate agent made two sales from it. Nice.
The moral of the story, you need to engage the services of and talk to a professional Mortgage Broker.
Credit Representative 432231 is authorised under Australian Credit Licence 389328.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.