Navigating the golden years sees many people considering a move. The kids have flown the nest, and the upkeep of a larger home may seem like an unnecessary burden. Downsizing becomes an enticing prospect, offering not just a smaller space but a lifestyle often tailored to the unique needs of those in their older years.
Don Crellin from Resolve Finance explains how homeowners can move seamlessly into this new phase of life.
Bridging finance can be a great financial solution for people looking to downsize their homes and purchase imminently, facilitating a seamless transition between selling an existing property and purchasing a new, more suitable one.
When downsizing, homeowners often face a timing misalignment between the sale of their current home and the acquisition of a new property. Bridging finance addresses this gap by providing interim funds, allowing individuals to secure their new home before finalising the sale of their existing property.
Typically, the loan covers the purchase price of the new property, with interest payments rolled into the loan amount during the bridging period. Once the initial property is sold, the homeowner repays the bridging loan, and any remaining funds are then used to settle the mortgage on the downsized home. This offers flexibility and convenience, ensuring a smooth downsizing process for those seeking a change in their housing needs.
Downsizing doesn’t always mean staying in the same neighbourhood. For many it is an opportunity to try a new area, so selling and renting can be an exciting option. This allows you to experience a different community and lifestyle before committing to a permanent move. Renting provides flexibility and the freedom to explore, making it an ideal choice for those who crave change without the long-term commitment.
For those opting to build a new, smaller home tailored to their specific needs, special loans can make the financial aspect more manageable. For example, Resolve Home Loans offer a loan product for those looking to downsize through new construction. Products of this nature bridge the gap between homes, ensuring a smooth transition, and use the equity from the existing home, eliminating the need for a second loan, covering associated fees and interest costs during the process.
This can be a strategic financial move for those individuals seeking to secure a stable income or lump sum in retirement if their land title and council zooming permit. This approach allows homeowners to capitalise on the demand for housing if they live in an area with a shortage of housing (which is almost every corner of Australia!). There is also then the option to move into the new smaller dwelling and sell or rent the original home.
For those empty nesters who have been contemplating a downsized lifestyle but hesitated due to financial concerns, these flexible financing options could unlock the door to your next chapter.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.