Buying Your Next Home in Dubbo & Central West NSW

The hard part isn't the loan

It's the timing. Sell first and you may need somewhere to live for a few months. Buy first and you're carrying two mortgages. Most people upgrading in Dubbo are trying to line up two settlements at once, and that's where it comes unstuck.

There's no single right answer. It depends on how much equity you have, how quickly your current place is likely to sell, and how much risk you're comfortable with.

Your three options

1. Sell first, then buy — safest financially. You know exactly what you have to spend. The trade-off is you may need a rental or a long settlement in between.

2. Buy subject to sale — your purchase is conditional on your sale going through. Fewer vendors accept it, and in a competitive situation it weakens your offer.

3. Keep the first home and buy the next — use the equity in your existing place as the deposit and rent it out. Turns your old home into an investment.

Should you keep the first home as an investment?

It's tempting, and sometimes it's right. Things worth working through before you decide:

• Whether the rent realistically covers the loan, rates, insurance, management and maintenance

• Whether your borrowing capacity stretches to both loans — lenders only count around 70–80% of rental income

• That your existing loan is an owner-occupier product and will likely reprice to investment rates

• The tax position, which is a conversation for your accountant, not us

• Whether the property will actually rent well in its location

Using the equity you've built

If you've owned your home a few years, your deposit for the next one may already be sitting in it. Equity is the difference between what your place is worth now and what you still owe. Releasing it means increasing your existing loan or setting up a separate split.

Values across Dubbo and the Central West have shifted a good deal in recent years. Plenty of people have more equity than they realise, and a current valuation is a cheap thing to find out.

The costs beyond the deposit

Second and subsequent buyers cop the full set, and stamp duty is the big one — first home buyer concessions don't apply once you've owned before. On a Central West purchase that alone can run to tens of thousands.

• Stamp duty — budget for it early, it's usually the largest single cost

• Conveyancing or solicitor's fees — $1,500 to $2,500 for a standard purchase, and more if you're selling and buying at once

• Building and pest inspection — around $400 to $800

• Agent's commission and marketing on the property you're selling

• Discharge and registration fees on your existing loan

• Break costs, if your current loan is fixed

• Moving costs, and storage or rent if there's a gap between settlements

We'll put the whole figure in front of you before you commit to anything, so the budget you're working with is the real one.

What to sort out before you start looking

• A realistic idea of what your current home will sell for

• Your borrowing capacity for the next purchase

• Whether you'll sell first, buy first or bridge

• Whether your current loan has fixed-rate break costs

• Whether your loan is portable — some can move to the new property, saving fees