Upgrade Your Family Home: Avoid These 5 Common Mistakes

Understanding Your Home Loan Options When Upgrading

As a FIFO Fixed Plant Operator, upgrading your family home represents more than just finding a bigger space – it's about creating a comfortable sanctuary for your family while you're away on rotation. The application process for upgrading can feel overwhelming, but understanding your borrowing capacity and the various Home Loan options available makes all the difference.

When you're looking to upgrade, you'll need to access Home Loan options from banks and lenders across Australia. Each lender offers different terms, and your current financial situation will determine which path works for your circumstances. The property market offers opportunities, but timing and preparation are crucial.

Calculating Your Borrowing Power

Your borrowing capacity depends on several factors unique to FIFO workers:

• Your regular FIFO income and rotation schedule
• Existing home equity in your current property
• Current debts and financial commitments
• The loan to value ratio (LVR) you're comfortable with
• Whether you'll need lenders mortgage insurance (LMI)

Most lenders will require recent bank statements showing your FIFO income patterns. This helps them understand your earning capacity and assess the loan amount you can manage. Some lenders specialise in FIFO applications and offer a streamlined application process that recognises your unique work arrangements.

Fixed vs Variable Interest Rates for Your Upgrade

Choosing between a fixed interest rate home loan and variable home loan rates is a key decision. Here's what you need to consider:

Fixed Interest Rate Benefits:
• Predictable repayments during your upgrade period
• Protection against interest rate rises
• Easier budgeting while managing two properties

Variable Interest Rate Advantages:
• Potential for interest rate discounts
• Flexibility to make extra repayments
• Access to offset account features
• Often lower initial home loan interest rate

Managing the Upgrade Process

When upgrading your family home, you have several approaches:

1. Sell First, Then Buy: This approach gives you certainty about your available funds but may require temporary accommodation

2. Buy First, Then Sell: This option provides security for your family but requires managing two properties temporarily

3. Simultaneous Settlement: Coordinating both transactions on the same day

Each approach has different implications for calculating home loan repayments and your overall financial position. Getting pre-approved helps you understand your options before making commitments.

The Application Process for FIFO Workers

When you apply for a home loan to upgrade your property, lenders will assess:

• Your FIFO employment history and contracts
• Income consistency across rotations
• Your ability to service the new loan amount
• The property you're buying and its location
• Your existing property if you're keeping it

Home Loan pre-approval gives you confidence when making offers and helps real estate agents take your offers seriously. The pre-approval process typically takes a few days to a week, depending on how quickly you can provide the required documentation.

Additional Costs to Consider

Upgrading your home involves more than just the new loan amount:

• Stamp duty on your new property (varies by state)
• Legal and conveyancing fees
• Building and pest inspections
• Moving and temporary accommodation costs
• Potential capital gains tax implications

An offset account can help you manage these costs by reducing the interest you pay on your home loan while you save for upgrade expenses.

Getting the Right Support

Working with a mortgage broker who understands FIFO work patterns can make your upgrade journey smoother. They can help you access Home Loan options from multiple lenders, compare Home Loan Rates, and find solutions that match your rotation schedule and family needs.

Upgrading your family home while working FIFO requires careful planning, but with the right preparation and professional support, you can create the perfect home for your family's future.

Call one of our team or book an appointment at a time that works for you to discuss your home upgrade options.