Before putting your home on the market, you may be debating whether to sell your existing home before buying the next one, or do it the other way around. Each scenario comes with pros and cons.
Buying a new property first
If you buy a new home before selling your current one, you won’t have any equity from a sale to put towards your new property.
If, however, you are in a strong financial position and can hold two properties simultaneously (at least for the short-term), this won’t be an issue. With no pressure to sell immediately, you can wait for the best offer to come your way on your current property.
Selling your current property first
If you sell your current property first, you’ll be in a better position when entering the market, knowing exactly what your budget is and if you will need a new loan to cover any shortfall.
The downside is timing the two transactions. If you haven’t found a new home by the time you sell, you may have rent and/or storage costs for several months until you find another property, which can become costly.
When selling your existing home to buy a new one, try to negotiate a better deal on a loan with your current lender or switch to a lender that offers a lower home loan rate. You can use our handy loan calculator to compare loans.