All Topics / Help Needed! / pensioners to sell home

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  • Profile photo of clancyfishclancyfish
    Participant
    @clancyfish
    Join Date: 2006
    Post Count: 0

    We are a married pensioner couple with a house valued at 1.4m and a $250k mortgage.  Our super has now whittled down to $120k and the writing is on the wall that we have to sell.  We don’t want to move from the area where are friends and family are but there are few options for downsizing as there are not a lot of villas around.  Our area has been capital growth static for a number of years now. We’d like to make a last stab at making some money and thought that we could sell the house, buy on the Sunshine Coast for high capital growth, and then sell in a couple of years with hopefully some extra cash to buy back into our area.  We are also experienced at doing houses up as we’ve done this a few times in our lives – we are also fit and healthy. We would get lots of professional advice before we did this but I’m keen to hear what the forum thinks of this strategy?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    risky I think

     

    When you sell you eat up equity with the agent fees and then when you buy again you have stamp duty, conveyancing, etc So you might lose about 8% of the value.

     

    You also have to consider the loan. Could you qualify for another loan again?

    Think about the effect on the pension too – could you be over the assets test if you downsize?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 284

    Good Day Clancyfish,

    Terry’s points are great.

     

    By the sounds, I imagine the issue is the pension is not enough>? which should be around $711+ per week for a couple?

    Let’s assume you can’t find any way to sustain your current situation, then you incur lots of fees in the sale, you would grant yourself the possibility however of lowering expenses & creating a larger cash balance to draw an income from.

    Although yes this would incur costs as an example it could leave you with

    -no debt on your new home

    -$869 per week income (full pension + draw down) or more depending on actual situation etc (this is general)

    and the capacity to add value to your home (*like you said you may)

     

    Now to clarify this is not taking into account your specific situation & it may be totally wrong for you.

     

    Kind regards

     

    Jaxon Avery

    Disclaimer: This is general information only & may not be right for your situation or circumstances.

    I deal exactly with this for clients as do other advisers, please understand the pro’s con’s & have a professional who helps you.

     

    Wish you the best!

     

     

     

    Jaxon | Jaxon Avery – Financial Adviser
    http://www.jpafinancialservices.com.au
    Email Me | Phone Me

    JPA Financial Services Pty Ltd

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi ClancyFish

    Can i ask what area you current live in and how old you are.

    I live up at Noosa and I can tell you the houses are a lot more than $1.4M so will depend on which part of the SC you are referring to.

    Depending on you age you maybe able to consider a Reverse Mortgage and release some additional equity by way of either a lump sum or regular monthly payment.

    Course you will need to factor in any other potential income to your current pension and the effects it may have.

    Cheers

     

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    100% Investment Finance now available on selected properties. Email us for further information.

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