You’ve found the perfect retirement village, but it’s potentially going to take months to sell your property, and you’re wondering if there is a way to make the move before your home is sold.
The good news is that there are options that could work for you. A common choice is to take out a relocation loan while your home is on the market. If you or your loved ones are considering a relocation loan to make the move to a retirement village, there are four key things to be aware of:
1. A relocation loan is essentially short-term bridging financeA relocation loan can allow you to move into a retirement village while waiting for the sale of your existing home.
It’s like a bridging loan, but some relocation loans don’t require interest repayments until your existing home is sold, which can be important for retirees.
A relocation loan also does not need to be for the full price of your retirement village home.
Many retirees choose to borrow just enough to pay their deposit and entry fees to secure a place, with the balance of their new retirement home payable only on the sale of their current home.
As with taking out any loan, do not borrow more than you need to.
2. Advantages of relocation loans
A relocation loan will allow you to secure your new home in a retirement village before your home is sold.
You can avoid the stress of trying to sell your home quickly, which could potentially result in getting a better price for your home.
You can gradually move your belongings over to your new home while your current property is being prepared for sale, assuming this does not disrupt any renovations or open houses.
3. Disadvantages of relocation loans
Simply put, a relocation loan means more debt.
You’ll potentially be charged higher interest rates for a relocation loan than a standard home loan.
You’ll need to sell your home by a specific date. Relocation loans are short-term, typically for periods of six or twelve months, which means you might have to drop your selling price significantly to sell it by the time you have to repay your relocation loan.
The lender may charge relocation loan application and/or valuation fees.
You must meet the loan provider’s normal lending requirements. If you don’t have enough equity in your current home you may not qualify.
If you still have a mortgage on your current home and your lender doesn’t offer bridging finance, you might need to change lenders. You could be charged exit fees if you do this.
4. The alternatives
There are other ways to finance your move to a retirement village besides using a relocation loan. We have them covered in [3 smart ways to fund your move to a retirement village].
Too much hassle?
Another option is Sellable.
Sellable can help you relocate seamlessly to a retirement village with the following added benefits:
– Sellable will pay you an upfront, guaranteed price for your home based on an independent valuation as soon as you want to move out. This removes the need for a relocation loan, home reversion scheme or reverse mortgage.
– After you get paid, Sellable makes renovations and improvements to your property to increase your home’s value. This saves you the time, hassle and money needed to organise it yourself.
– Sellable then finds the best agent to sell it on your behalf. If your home is sold for more than your guaranteed price, Sellable will give you 75% of any upside. This ensures Sellable’s interests are aligned with yours.
If you’d like more information, give the Sellable team a call on 1300 722 910, or visit their website.