#I want to relocate

Everything you need to know when relocating

Thinking about a fresh start? Whether you’re chasing a sea change, tree change, or moving interstate for work or lifestyle, relocating can be a big move — but it doesn’t have to be a stressful one. We’re here to make the transition smooth, from understanding your borrowing power in a new location to navigating settlement from afar, we’ll guide you through every step of the journey.

What’s inside this guide

Need further help on how to save for a house deposit?

#avoid selling home

Can I Buy My Next House Without Selling My Existing Home

Good news—you can buy your next home without selling your current one! At Madd, we simplify the process by exploring options like bridging loans and equity releases, ensuring a seamless, stress-free transition to your dream property.

4 methods to buy without selling your exisiting house

1. Mortgage

You can apply for a mortgage on your new house, while keeping your existing home. If you meet the lender’s criteria, you will be able to secure a loan to finance your new home without selling your current one. However, it’s important to ensure that you can manage the financial responsibilities simultaneously

2. Home Equity Loan Or Line Of Credit

If you have built up equity in your current house, you can consider using it to obtain a home equity loan or line of credit. This allows you to borrow against the equity in your existing house and use the funds for the down payment or purchase of your new house

3. Renting Out Your Current House

Another option is to rent out your current house and use the rental income to cover the mortgage repayments. This allows you to retain ownership of your existing property while generating additional income to support the purchase of your new house.

4. Bridging Loan

This is a short-term loan that can provide temporary financing until you sell your current house. It can bridge the gap between the purchase of your new house and the sale of your existing house. Once your old house is sold, you can use the proceeds to pay off the bridging loan.

Need further help on how to save for a house deposit?

Buying your very first home – and obtaining the finance to do so – can be a time consuming and stressful exercise. The good news is that it doesn’t have to be.

1.

#Bridging Loans

Bridging Loans: A Short-Term Solution for Property Transitions

Bridging loans are short-term loans designed to bridge the financial gap between the purchase of a new property and the sale of an existing one. They can be helpful when you need immediate funds for a new property but haven’t yet received the proceeds from selling your current property.

Here’s a general overview of how bridging loans work:

Purpose

Bridging loans are typically used purchase a new property before the sale of the current property is finalised.

Loan Duration

Bridging loans are short-term loans, usually lasting up to a year. The exact duration depends on the lender and the specific circumstances of the borrower

Security

Bridging loans are typically secured against the current property you’re selling, the new property you’re purchasing, or a combination of both. This means that if you fail to repay the loan, the lender has the right to sell the property used as security to recover the debt.

Loan Amount

The amount you can borrow through a bridging loan depends on various factors, such as the value of the property being used as security and your ability to repay the loan. Typically, lenders offer bridging loans ranging from thousands to millions of dollars.

Interest Rates

Bridging loans often have higher interest rates compared to traditional mortgages because of their short-term nature and increased risk for the lender. Because they are short term, they are usually variable rates so you can exit with no penalty when the current property is sold.

Repayments

Bridging loans usually require interest-only repayments during the loan term, with the principal repaid in full at the end. Some lenders may allow you to roll up the interest, meaning it’s added to the loan balance and repaid completely at the end.

Application Process

To apply for a bridging loan, you’ll typically need to provide details about the properties involved, your financial situation, and your repayment plan.

Did you know the Madd Broker difference

It’s important to carefully evaluate your situation, consider the associated costs and risks, and consult with a professional to determine the best option for your specific circumstances. At Madd, our brokers are the right people to discuss any concerns you may have. We live and breathe loans so we can assist you in understanding and assessing all of your options to help make the process less stressful.

2.

#Stamp duty

Stamp Duty For Different States

In Australia, stamp duty is a tax imposed by state and territory governments on certain transactions, including property purchases. The rates and rules for stamp duty vary between different states and territories.

Here’s a general overview of how stamp duty differs across Australian states:

New South Wales (NSW)

NSW has a tiered stamp duty system based on the purchase price of the property. The rates increase as the property value rises. Additionally, NSW offers stamp duty concessions for first home buyers purchasing properties below certain price thresholds.

Victoria (VIC)

Stamp duty rates in Victoria also vary based on the property value. VIC provides stamp duty exemptions or concessions for first home buyers purchasing properties below certain price thresholds. From July 1, 2017, the Victorian government introduced the option for first home buyers to pay stamp duty based on the value of the property, or a significantly reduced amount over time through the First Home Owner Grant (FHOG) program.

Queensland (QLD)

Queensland has a similar approach to NSW and VIC, with stamp duty rates based on property value. QLD offers concessions for first home buyers purchasing properties below certain price thresholds.

Western Australia (WA)

Stamp duty rates in Western Australia are also based on the purchase price of the property, with different tiers and rates. WA offers stamp duty exemptions or concessions for first home buyers, depending on the property value.

South Australia (SA)

SA has a progressive stamp duty system, where the rates increase as the property value rises. The SA government provides stamp duty concessions for first home buyers, subject to certain eligibility criteria.

Australian Capital Territory (ACT)

The ACT has a progressive stamp duty system, with rates increasing as the property value rises. The ACT government provides stamp duty concessions for first home buyers, which vary depending on the property value.

Northern Territory (NT)

NT applies stamp duty based on the property value, with different tiers and rates. NT provides stamp duty concessions for first home buyers purchasing properties below certain price thresholds.

Stamp Duty Calculator

All states in Australia work out Stamp Duty differently, use our Madd Stamp Duty Calculator to work out exactly what government fees you’ll be up for and don’t get caught out.

3.

#capital gains tax

When You Sell, You May Have To Pay Capital Gains Tax

Yes, when you sell certain types of assets, including property, investments, or business assets, you may be liable to pay capital gains tax (CGT). Capital gains tax is a tax on the profit or gain you make from the sale of these assets. Remember that tax laws and regulations can change, so it’s important to stay updated on the latest rules and seek professional advice to understand the specific capital gains tax requirements.

Here’s a general overview of how stamp duty differs across Australian states:

Calculation of Capital Gains

The capital gain is calculated by subtracting the “cost base” of the asset from the “capital proceeds” received from its sale. The cost base typically includes the purchase price of the asset, acquisition costs, and certain other expenses related to buying and selling the asset. Capital proceeds are the amount you receive from selling the asset, minus any associated selling costs.

Exemptions and Discounts

Australia offers exemptions and discounts on capital gains tax. For example, in Australia, the main residence exemption allows you to avoid CGT on the sale of your primary residence. Additionally, you may be eligible for a CGT discount if you’ve held the asset for a certain period (e.g., one year or more) before selling.

Tax Rates

The capital gains tax rate depends on various factors, such as your income level, the type of asset sold, and the duration of asset ownership. In Australia, the capital gains are generally added to your taxable income and taxed at your marginal tax rate. However, there may be specific CGT rates or concessions for certain assets or circumstances.

Seek Professional Advice

Capital gains tax can be complex, and its implications may vary depending on your specific circumstances. It is advisable to consult with a tax professional, such as an accountant or tax advisor, who can provide personalised advice tailored to your situation and ensure compliance with relevant tax laws.

Did you know?

Tax laws and regulations can change, so it’s important to stay updated on the latest rules and seek professional advice to understand the specific capital gains tax requirements.

4.

#Borrowing Capacity

How Banks Work Out My Borrowing Capacity

Lenders assess your borrowing capacity by examining your financial situation, including income, expenses, employment history, credit score, assets, and debts. These factors help them determine the maximum loan amount you can comfortably repay.

5.

Though specific requirements vary by lender, here are some common factors they consider:

Income and Expenses

Banks typically analyze your income to determine your ability to repay a loan. They consider factors such as your employment status, salary, wages, bonuses, and any other sources of income. They also assess your regular expenses, including living costs, bills, loan repayments, and other financial commitments.

Debt-to-Income Ratio

Lenders calculate your debt-to-income ratio by comparing your total monthly debt obligations (such as existing loans, credit card payments, and other commitments) to your monthly income. A lower debt-to-income ratio generally indicates a lower financial burden and may increase your borrowing capacity.

Credit History

Banks assess your credit history by reviewing your credit report, which includes information about your past borrowing and repayment behavior. A good credit history with a consistent record of repaying debts on time can positively influence your borrowing capacity.

Loan-to-Value Ratio (LVR)

The LVR represents the proportion of the property’s value that you are borrowing. Banks generally have maximum LVR limits, meaning they may only lend up to a certain percentage of the property’s value. A lower LVR can increase your borrowing capacity, while a higher LVR may result in more limited borrowing options or require additional measures like lenders mortgage insurance (LMI).

Interest Rates and Loan Term

Banks consider prevailing interest rates and the term of the loan when assessing your borrowing capacity. Higher interest rates can reduce your borrowing capacity, as they result in higher monthly repayment obligations. Additionally, longer loan terms can impact the amount you can borrow, as they extend the repayment period.

Financial Stability

Banks evaluate your financial stability, including factors like your employment history, length of time with your current employer, and stability of income. Demonstrating a stable financial situation can enhance your borrowing capacity.

Helpful tips

It’s important to note that each bank or lender may have its own lending policies and criteria for determining borrowing capacity. They may also consider factors specific to the type of loan you are seeking, such as property type or purpose (e.g. owner-occupied or investment). To get an accurate assessment of your borrowing capacity, it’s recommended to speak with your Madd Mortgage broker.

They can evaluate your individual circumstances, consider multiple factors, and provide you with an estimate of how much you may be able to borrow.

#Associated Fees

Hidden Costs of Home Buying: Beyond the Purchase Price

When buying a property, there are several fees and costs associated with the purchase, in addition to the purchase price. It’s crucial to budget for these associated fees when planning to purchase a property, as they can significantly impact the overall cost of the transaction. It’s advisable to consult with professionals, such as solicitors, conveyancers, and mortgage brokers, to understand the specific fees applicable to your situation and location.

Here are some common home-buying fees to consider, though they vary by location and circumstance:

Stamp Duty

Stamp duty is a government tax imposed on property transactions. The amount of stamp duty varies based on the property’s purchase price, location, and whether you are a first home buyer or not. It is typically one of the largest costs associated with buying a property.

Legal and Conveyancing Fees

Engaging a solicitor or conveyancer is essential for handling the legal aspects of the property purchase, including title searches, contract preparation, and settlement. Their fees can vary, so it’s advisable to obtain quotes from different professionals.

Building and Pest Inspections

It’s recommended to conduct building and pest inspections to identify any potential issues with the property. These inspections come at a cost but can help you make an informed decision about the property’s condition and potential future expenses.

Lender’s Mortgage Insurance (LMI)

If you borrow more than a certain percentage of the property’s value (usually 80%), lenders may require you to pay LMI. This insurance protects the lender if you default on the loan. The cost of LMI varies based on the loan amount and the loan-to-value ratio (LVR).

Loan Application and Establishment Fees

When applying for a mortgage, lenders may charge an application or establishment fee. These fees cover administrative costs associated with processing your loan application and setting up the loan.

Mortgage Registration Fee

This fee is charged by the government for registering the mortgage on the property title. The cost varies depending on the state or territory in which the property is located.

Insurance

It’s important to arrange building and contents insurance to protect your property and belongings. The cost of insurance will depend on factors such as the property’s value, location, and the level of coverage you choose.

Did you know?

6.

#Key Professionals

Key Professionals Involved In The Property Purchase Process

When purchasing a property, it’s important to work with various professionals who can provide guidance, expertise, and necessary services throughout the process. Remember, the need for these professionals may vary depending on your circumstances and the complexity of the property transaction. It’s advisable to research and select reputable professionals who have experience in the relevant field and can provide the necessary expertise to support your property purchase.

While your specific needs may vary, here are some common professionals you might work with:

Real Estate Agent

A real estate agent can help you find and negotiate the purchase of a property. They have knowledge of the local market, can provide property listings that match your criteria, and assist with the negotiation process.

Solicitor or Conveyancer

Engaging a solicitor or conveyancer is essential for handling the legal aspects of the property purchase. They review contracts, conduct title searches, prepare legal documents, and facilitate the settlement process.

Your Madd Mortgage Broker or Lender

If you require financing for the property purchase, a Madd Mortgage Broker or Lender can assist you in obtaining a loan. They can help you understand your borrowing capacity, compare loan options, and guide you through the loan application process.

Building and Pest Inspectors

It’s recommended to engage professionals to conduct building and pest inspections on the property. They assess the property’s condition, identify any structural or pest-related issues, and provide you with a comprehensive report.

Valuer

A valuer assesses the property’s market value to determine its worth. They provide an independent valuation report, which can be essential for obtaining financing and ensuring you’re paying a fair price for the property.

Accountant or Financial Advisor

Consulting with an accountant or financial advisor can provide valuable insights into the financial aspects of the property purchase. They can assist with tax implications, financial planning, and ensure you have a clear understanding of the financial commitments involved.

Insurance Provider

It’s important to arrange insurance coverage for the property. Engaging an insurance provider will help you obtain building insurance to protect the property’s structure and contents insurance to safeguard your belongings.

Did you know?

It’s crucial to budget for these associated fees when planning to purchase a property, as they can significantly impact the overall cost of the transaction. It’s advisable to consult with professionals, such as solicitors, conveyancers, and mortgage brokers, to understand the specific fees applicable to your situation and location.

7.

#unit or house?

Unit vs. House: Which is Right for You?

The decision to buy a unit or a house depends on several factors that are specific to your personal preferences, financial situation, and lifestyle.

8.

Here are a few considerations to help you make an informed decision:

Affordability

Consider your budget and the cost of properties in your desired location. Units or apartments tend to be more affordable than houses in many areas, especially in urban settings. However, prices can vary significantly based on factors such as location, size, amenities, and demand.

Space and Lifestyle

Determine your space requirements and lifestyle preferences. Houses generally offer more space, both indoors and outdoors, which can be beneficial for families or individuals who value privacy, need extra rooms, or enjoy gardening and outdoor activities. Units or apartments, on the other hand, often have shared amenities, require less maintenance, and may be more suitable for individuals or couples without children.

Location

Consider the location and its impact on your decision. Units are commonly found in urban areas, close to amenities, public transportation, and entertainment options. Houses, on the other hand, are typically found in residential neighborhoods and suburbs, offering more space but often requiring longer commutes.

Maintenance

Assess your willingness and ability to maintain the property. Units generally have lower maintenance requirements as the building’s management or body corporate may handle certain aspects such as landscaping, exterior maintenance, and common area upkeep. Houses, on the other hand, require more individual responsibility for maintenance and repairs.

Potential for Growth

Consider the potential for property value appreciation. Houses often have greater potential for capital growth, especially if they are located in desirable neighbourhoods. However, the market conditions and location-specific factors can also influence the growth potential of units.

Future Plans

Take into account your future plans and long-term goals. If you anticipate changes such as expanding your family, working from home, or accommodating aging parents, a house may offer more flexibility. If you prioritize convenience, low maintenance, and a city-centric lifestyle, a unit might be a better fit.

Did you know?

It’s important to conduct thorough research, visit properties, and seek advice from industry professionals. Your Madd broker can assist you with concerns and even provide you with tips on what to look out for when searching for the right property. The first step is knowing what you can afford and looking at the return on investment for that investment or property.

#know your credit rating

What Affects Your Credit Score?

Before you jump at “buy now, pay later” apps like Afterpay and ZipPay, do you know what affects your credit score vs what doesn’t? Your credit score (or your credit rating) will generally range from 0 to either 1000 or 1200, depending on the credit bureau calculating it. Credit scoring weighs up multiple factors linked to your financial history, such as the types of loans you have applied for or have paid off, the total debt to your name, and an in depth look at your repayment history covering everything from phone bills to mortgages. However, when it comes to knowing what affects your credit score, there are some surprisingly good and bad factors to think about in order to present yourself as financially fit.

9.

Six Factors That Can Negatively Affect Your Credit Score

Having a good credit score is crucial if you want to obtain the right pre-approvals for big purchases later in life, such as a car loan or a mortgage. In some scenarios, it can also allow you to access more favourable loan terms and interest repayments – so what do you need to keep an eye out for in order to stay in the best possible position?

Late Repayments

The concept of a “late repayment” may vary greatly between yourself and your lending provider. Even if you are as little as fourteen days behind on paying your phone bill, this can be lodged on your credit file – and take years to remove.

Too Many Credit Applications

If you shop around for credit and apply to multiple credit providers within a short timeframe, this can lower your credit score as an enquiry is added to your report each time you apply – flagging you as a risk for potential providers.

Missed BNPL Payments

Interest-free, “buy now pay later” platforms like Afterpay are seen as an ongoing line of credit, or debts that you could potentially have. While this can impact obtaining future credit, missed payments will also be lodged as a red mark on your credit file.

Payday Loans

When calculating your credit score, credit reporting bodies generally look at the type of providers you have applied for credit with. Payday loans usually come with massive interest fees attached, and indicates that you may not be financially stable.

Incorrect Contact Details

While your current address may not seem like a factor when it comes to what affects your credit score, having incorrect details listed greatly increases your chance of a miscommunication when it comes to staying on top of any repayment obligations.

Not Checking Your Credit File

Unfortunately many Aussies only tackle their credit file once it’s too late – meaning that they’ve been declined for a loan, and they’re trying to understand why. Check your credit file regularly to spot any potential red flags and avoid future pain.

Sourcing Help With What Affects Your Credit Score

If you are ready to “level up” and get financially fit, then it’s never too early to seek professional financial advice. Whether your next goal is to retire early, take a gap year or purchase a home, George Samios and the team at Madd Life are ready and waiting.

With their entire business built on referrals, the team at Madd Loans have taken the mortgage broking industry by storm. Their overwhelmingly positive feedback has helped them to take out numerous industry awards, including the title of “Queensland’s Broker Of The Year” for four consecutive years. However, after working with a broad variety of clients in regards to their mortgage options, it made sense for the team at Madd to have the capacity to offer a full financial planning service.  

If thinking about your financial future and tackling your credit score strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.

Want to Make a Difference? Join us at the Madd Ball and raise money for the Children’s Hospital Foundation.

Find your perfect home loan with our help. Let's get started.

Want to give your students the best path to home ownership? Book a free workshop at school.

Retirement, asset protection, financial optimisation. We guide you to achieve your dreams.

Like free pizza and financial freedom? Register your office for a Madd Lunch & learn

We help clients secure optimal financing solutions across all industries and asset classes at Madd Commercial.

Want to give your students the best path to home ownership? Book a free workshop at school.

Save on asset finance across Australia. Madd Vehicle & Asset: In-house experts find the best deals for you.

Want to Make a Difference? Join us at the Madd Ball and raise money for the Children’s Hospital Foundation.

Madd: More than a job, it's a Lifestyle. Join our award-winning team.

#I want to relocate

Everything you need to know when relocating

What’s inside this guide

Need further help on how to save for a house deposit?

#avoid selling home

Can I Buy My Next House Without Selling My Existing Home

4 methods to buy without selling your exisiting house

1. Mortgage

2. Home Equity Loan Or Line Of Credit

3. Renting Out Your Current House

4. Bridging Loan

Need further help on how to save for a house deposit?

1.

#Bridging Loans

Bridging Loans: A Short-Term Solution for Property Transitions

Here’s a general overview of how bridging loans work:

Purpose

Loan Duration

Security

Loan Amount

Interest Rates

Repayments

Application Process

Did you know the Madd Broker difference

2.

#Stamp duty

Stamp Duty For Different States

Here’s a general overview of how stamp duty differs across Australian states:

New South Wales (NSW)

Victoria (VIC)

Queensland (QLD)

Western Australia (WA)

South Australia (SA)

Australian Capital Territory (ACT)

Northern Territory (NT)

Stamp Duty Calculator

3.

#capital gains tax

When You Sell, You May Have To Pay Capital Gains Tax

Here’s a general overview of how stamp duty differs across Australian states:

Calculation of Capital Gains

Exemptions and Discounts

Tax Rates

Seek Professional Advice

Did you know?

4.

#Borrowing Capacity

How Banks Work Out My Borrowing Capacity

5.

Though specific requirements vary by lender, here are some common factors they consider:

Income and Expenses

Debt-to-Income Ratio

Credit History

Loan-to-Value Ratio (LVR)

Interest Rates and Loan Term

Financial Stability

Helpful tips

#Associated Fees

Hidden Costs of Home Buying: Beyond the Purchase Price

Here are some common home-buying fees to consider, though they vary by location and circumstance:

Stamp Duty

Legal and Conveyancing Fees

Building and Pest Inspections

Lender’s Mortgage Insurance (LMI)

Loan Application and Establishment Fees

Mortgage Registration Fee

Insurance

Did you know?

6.

#Key Professionals