When Your Family Needs More Space
Life changes quickly when you have a growing family. Maybe you've welcomed another child, or the kids are getting older and need their own rooms. Perhaps you're working from home now and need a dedicated office space. Whatever your reasons, upgrading your family home is an exciting milestone that many Coffs Harbour families experience.
The question isn't whether you should upgrade - it's how to fund it in a way that makes financial sense for your situation. Understanding your home loan options and how different home loan products work can make all the difference between feeling overwhelmed and feeling confident about your decision.
Understanding Your Home Loan Options
When you're looking to upgrade your family home, you'll encounter various home loan packages designed for different needs. The key is finding one that aligns with your financial goals and lifestyle.
Owner occupied home loan products come in several forms:
- Variable rate loans: Your interest rate can move up or down based on market conditions and lender decisions
- Fixed interest rate home loan: Lock in your interest rate for a set period, usually between one and five years
- Split loan: Combine both variable and fixed portions to balance flexibility with rate certainty
Each option has distinct home loan features and home loan benefits. A variable rate gives you flexibility to make extra repayments without penalties, while a fixed rate provides certainty about your repayments. Many families in Coffs Harbour choose a split rate to enjoy advantages from both approaches.
Building Equity to Improve Borrowing Capacity
One of the most valuable aspects of home ownership is that you build equity over time. Equity is the difference between what your property is worth and what you still owe on your home loan. As property values in Coffs Harbour have grown and you've been making repayments, you've likely built significant equity.
This equity can improve borrowing capacity when you're ready to upgrade. Your loan to value ratio (LVR) - the percentage of the property value you're borrowing - becomes more favourable as your equity increases. A lower LVR often means you'll access better interest rate discounts and may avoid Lenders Mortgage Insurance (LMI), which can save you thousands of dollars.
Ready to get started?
Book a chat with a Finance & Mortgage Broker at Get Approved today.
Exploring Interest Rate Options
The home loan interest rate you secure can significantly impact your financial stability over the years. That's why it's worth taking time to compare rates and understand what affects them.
When you apply for a home loan, lenders consider several factors:
- Your deposit size and LVR
- Your employment and income stability
- Your existing debts and expenses
- Your credit history
- The property type and location
Current home loan rates vary between lenders, and the advertised rate isn't always what you'll receive. Rate discount opportunities exist based on your individual circumstances. Working with a mortgage broker in Coffs Harbour means you can access home loan options from banks and lenders across Australia, not just the ones you know about.
Principal and Interest vs Interest Only
When upgrading, you'll choose between principal and interest repayments or interest only periods. Most families opt for principal and interest because you're actively paying down your loan amount and building wealth through property ownership.
Interest only loans might suit specific situations, like if you're keeping your current property as an investment while upgrading to a new family home. However, your repayments will be higher once the interest only period ends, so it's important to plan ahead.
Home Loan Features That Add Value
Modern home loan packages include various features that can help you achieve home ownership goals faster:
Offset account: A linked offset account (often called a mortgage offset) is a transaction account linked to your home loan. The balance reduces the interest you pay, potentially saving thousands over the loan term.
Portable loan: If you think you might move again in the future, a portable loan lets you transfer your existing loan to a new property, avoiding discharge and new application fees.
Redraw facility: Make extra repayments and access them later if needed, giving you flexibility for unexpected expenses.
Split loan options: Divide your loan into multiple portions with different features, tailoring your loan structure to your needs.
The Home Loan Application Process
Once you've done your research and found a property, the home loan application process begins. Getting home loan pre-approval before you start seriously looking at properties gives you confidence about what you can afford and shows sellers you're a serious buyer.
The application involves:
- Gathering documentation (payslips, tax returns, bank statements)
- Completing application forms
- Property valuation
- Formal approval
- Settlement
Calculating home loan repayments before you commit helps ensure you're comfortable with the ongoing costs. Remember to factor in rates, insurance, maintenance, and the reality that variable home loan rates can change.
Getting Professional Support in Coffs Harbour
Upgrading your family home is about more than just finding lowest rates - it's about creating your secure future and providing the space your family needs to thrive. The right home loan structure supports your long-term financial goals while giving you room to enjoy life today.
Every family's situation is different. Your income, expenses, goals, and timeline all influence which home loan products and home loan features will work for you. A home loan health check can reveal whether your current loan still serves your needs or if refinancing could save you money.
As a local finance and mortgage broking business, Get Approved understands the Coffs Harbour property market and can help you access home loan options that match your upgrade goals. We work with multiple lenders to find suitable loan structures, whether you need lower repayments, want to invest in property further down the line, or simply want to provide more space for your growing family.
Making Your Move
Upgrading your family home represents an important step in your property journey. With the right information and support, you can make decisions that benefit your family both now and into the future.
Don't leave your home upgrade to chance or settle for the first option you find. Taking time to understand your choices and compare home loan rates comparison across multiple lenders ensures you're making an informed decision. Your family's future deserves that level of care and attention.
Call one of our team or book an appointment at a time that works for you. Let's discuss your upgrade plans and explore the home loan options available to make your family's next chapter a reality.
