Mortgage Broker Concord
Concord and Concord West are house suburbs, and house suburbs generate a particular kind of lending question. Not "how do I get in", but "how do I move" — buy before selling, or sell before buying? Renovate or move? And how much of the equity already in the house can actually be used?
Helping buyers, owners and investors in Concord
Links Property Finance is a Sydney mortgage broker. There is no Concord office and we won't pretend there is. What we do is structure finance for people moving within the Inner West, and a lot of that work happens with people who already own.
Concord's lower-density, largely freestanding housing means fewer of the apartment-specific problems that dominate around Burwood and Homebush, and more of the questions that come with owning something already: equity, timing, renovation and what a second property does to your borrowing.
Equity is not the same as available equity
If your home is worth $1.6 million and you owe $500,000, your equity is $1.1 million. What you can borrow against it is a different number. Most lenders will lend up to 80 per cent of the value without lenders mortgage insurance, so in that example the usable figure is 80 per cent of $1.6 million less the $500,000 you owe: $780,000.
That is a ceiling, not an entitlement. You still have to service the larger loan on your income. Estimate your usable equity.
Buy first or sell first?
The most common question from Concord owners, and there is no universally right answer. There is a right answer for your circumstances.
Selling first
You know exactly what you have to spend, and you buy with cash certainty. The cost is that you may need somewhere to live in between, and you are buying into whatever the market does while you wait. Some people manage this with a long settlement on the sale or a rent-back arrangement with the buyer.
Buying first, with bridging finance
Bridging finance covers the new purchase before the old property sells. The lender assesses your capacity to hold both loans for a limited period, and the bridging debt is repaid from the sale proceeds. It gives you the freedom to buy the right house when it appears rather than when your sale settles.
What bridging costs
Interest accrues on the combined debt during the bridging period, often capitalised rather than paid monthly, and lenders set a maximum bridging term, commonly six to twelve months. If the sale takes longer or achieves less than expected, you carry the difference. Lender policy on bridging varies considerably, including whether they require the existing property to be under contract.
The middle path
Some owners buy with a long settlement and list immediately, which reduces the bridging window or removes it. Whether that works depends on the vendor's flexibility. It is worth having the finance modelled for each scenario before you decide, because the decision is usually made under time pressure once a property appears.
Renovating rather than moving
A kitchen or bathroom is often funded by a simple loan increase against existing equity, subject to serviceability and a valuation.
Extensions and rebuilds usually need a construction loan, which releases funds in stages against a fixed-price builder's contract.
Funds are drawn at slab, frame, lock-up, fit-out and completion, with a valuer inspecting at each stage.
Lenders generally want approved plans before releasing construction funds. Complying development can be faster than a full DA.
Most lenders require a licensed builder, a fixed-price contract and home warranty insurance rather than an owner-builder arrangement.
Construction lending is a specialisation. Some lenders do it well, some avoid it, and the difference shows in how smoothly draws are released.
Refinancing in Concord
Owners who have held for a while are often on a rate set years ago, against a loan-to-value ratio that has since improved considerably. That combination usually means a review is worth doing. Below 80 per cent, better pricing generally becomes available, and any further borrowing avoids lenders mortgage insurance.
A refinance is also the natural moment to fix a structure that no longer fits: consolidating a personal loan, adding an offset account, splitting part of the loan to a fixed rate, or separating an investment portion for clean record-keeping. Sometimes the answer is simply to ask your existing lender to reprice, which costs nothing and takes a phone call. Book a loan health check.
Using equity to invest
Equity in a Concord home is a common source of the deposit for an investment property. The usual structure keeps the borrowing separate: a split or a second loan secured against your home funds the deposit and costs, and a separate loan funds the balance of the investment purchase. Keeping them separate makes the record-keeping cleaner, which matters at tax time.
Serviceability is the binding constraint. Lenders count only part of expected rental income, commonly around 80 per cent, and assess both loans at a buffered rate. How investment lending is assessed. How the structure affects your tax position is a question for your accountant.
First home buyers in Concord
Less common here than in the unit suburbs nearby, but not rare, particularly for semis, townhouses and duplexes.
House prices in Concord generally sit above the NSW first home buyer duty exemption threshold of $800,000 and often above the $1 million concession ceiling, which means full transfer duty as a cash cost on top of your deposit. That single line item changes what is affordable more than most buyers expect. Work out the duty at any price.
The Australian Government 5% Deposit Scheme has a Sydney cap of $1.5 million, which does reach into Concord's range for smaller properties. A family guarantee is the other route that makes a house purchase possible without a 20 per cent deposit. How guarantor loans work.
Useful tools
Home equity
Total and usable equity in the home you already own.
OpenBorrowing power
What a lender might let you borrow, from your income.
OpenOffset savings
What an offset balance saves you in interest.
OpenExtra repayments
The interest saved and years cut by paying a little more.
OpenCan I afford this property?
Asking price in, full cash requirement out.
OpenRefinance savings
What a sharper rate would save over your remaining term.
OpenWhy people work with Links
Common questions about buying and owning in Concord
Should I buy before I sell?
It depends on how much certainty you want and how much flexibility is worth to you. Selling first gives you a known budget and no bridging cost, at the price of possibly needing interim accommodation. Buying first with bridging finance lets you act when the right property appears, at the cost of interest on both debts and the risk that your sale takes longer or achieves less than expected. Modelling both before you are under time pressure is the practical step.
How much equity can I actually access?
Most lenders will lend to 80 per cent of the property's value without lenders mortgage insurance, so your usable equity is roughly 80 per cent of the current valuation less what you still owe. Above 80 per cent is sometimes possible with insurance. Whatever the equity calculation allows, you still have to demonstrate you can service the larger loan, and that is often the tighter constraint of the two.
How does a construction loan differ from a normal home loan?
Funds are released in stages against a fixed-price builder's contract rather than in one lump at settlement, with a valuer usually inspecting before each draw. You generally pay interest only on the amount drawn during the build. Lenders typically require approved plans, a licensed builder and home warranty insurance. Not every lender handles construction well, and the difference shows in how quickly progress payments are released.
Can I renovate using my existing loan?
For cosmetic work, often yes, through a loan increase against existing equity, subject to a valuation and to your ability to service the larger loan. For structural work, extensions or a rebuild, lenders generally want a construction loan structure instead. The dividing line varies between lenders, and it is usually the scope of works rather than the dollar figure that decides it.
Will taking equity out to invest hurt my borrowing power?
It reduces it, because the new debt is assessed against your income at a buffered rate. The expected rental income helps, but lenders generally count only part of it, commonly around 80 per cent, to allow for vacancy and costs. Whether the numbers work depends on your income, the existing debt and the property, and it is worth checking before you commit rather than after you have made an offer.
Is it worth refinancing if I am only part way through a fixed term?
Sometimes, but break costs on a fixed loan can be substantial and are calculated by the lender based on movements in wholesale rates. The honest approach is to ask your lender for a break cost figure in writing, then compare it against the saving over the remaining term. Often the answer is to wait until the fixed period ends and prepare the switch in advance so it happens the week the rate reverts.
Do you work with clients in Concord in person?
Yes, where it helps, though most of the work happens by phone, video and secure document upload. Links Property Finance is based in Sydney and does not operate an office in Concord. Nothing about the loan process depends on proximity, and evenings and weekends are usually easier for people who work.
Work out the move before you make it.
Buy first, sell first, or renovate and stay. Each one has a different loan structure and a different cost. Twenty minutes is usually enough to know which fits.
