You bought your first home a few years ago, and now you’re getting itchy feet. Maybe you’ve spotted a new home for sale in a neighbourhood closer to work, or you’ve got a child on the way and don’t have quite as much room as you’d like. Whatever the reason, there’s that nagging voice at the back of your head telling you it’s time to move on.
But you’re not sure. After all, buying your first house was tough enough, and you’ve grown attached to the place. Is it really time to sell up, take on a new home loan and move to greener pastures? Or are you better off staying where you are and figuring out another solution?
Just how long should you hold on to your first home for? Enough questions. Time for some answers.
How is your credit score?
When first shopping around for a home loan, a lot of new buyers will come up against something that might seem foreign: their credit score. Up until their first home purchase, they might have only had a credit card or a car loan to their names. But with such a significant piece of lending, it’s no surprise that banks and brokers are taking a good hard look at your credit history to see if you’re a good bet – or not.
Now that you’re more experienced, you’ll know the power that credit scores have. This is the first factor in determining whether it’s time to move. Have you been keeping up with your mortgage repayments? Have you been consistent? If so, you could find that you’ve got an excellent credit score, and that you are hardly a risk at all to any lender. It’s a valuable trait that translates to cold hard cash – the less risky you are, the more likely you are to get better deals on your home loan.
Before you even start pondering where you’re going to move, make sure you investigate your credit score.
Are you selling for profit?
If you’re looking to sell your first home and move on, make sure you aren’t selling it short.
Your first home might be far more valuable now than when you first bought it – and that’s almost pure profit for you as the homeowner. But it can take time for those capital gains to become truly significant.
Take Sydney for example. According to the CoreLogic Pain and Gain report for the June 2016 quarter, houses that were sold for profit were held for an average of just over 10 years. Considering the rapid year-on-year value increases that Sydney properties are known for over that time, you can bet anyone selling now is getting a pretty significant chunk of change after such a long hold period.
The lesson here is that if you’re looking to sell your first home and move on, make sure you aren’t selling it short by being impatient. Property is all about the long game, after all.
What about personal factors?
Of course, you can’t simply ignore the personal factors. Even if you’ve only lived in your first home for the last couple of years, there are sudden circumstances that require you to up sticks. It could be the aforementioned baby, it could be a new job on the other side of the state, it could be that you need to move closer to the city (or further away).
Even if you have terrible credit or not much equity, you can sometimes find it’s a necessity to let go of your first home before you’d like to.
Whatever the reason for your move, make sure you get in touch with the mortgage brokers at Smartline. We can help you find the ideal loan to help you move along the property ladder – whether it’s your first home, your second or your twentieth.
You can contact a Smartline Mortgage Adviser on 13 14 97 for mortgage advice. Or complete our call request form and we’ll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.