Mortgage

A mortgage allows you to buy a property by borrowing money from a lender while using the property itself as security. You repay the loan through regular instalments that include both principal and interest, or in some cases interest only for a limited period. If you miss payments or default, the lender has the legal right to take possession of the property and sell it to recover their money. When selling a home with an existing mortgage, the outstanding balance is automatically paid out at settlement before you receive any remaining funds. This means that the final sale price directly affects how much money you take home and how much equity you build for your next purchase. In Australia, many homeowners upgrade, refinance or downsize based on how their mortgage aligns with their financial goals and market conditions. A well structured sale with a strong agent can significantly improve your financial position and reduce long term interest costs.

Practical Example

You purchased your home several years ago and still owe $385,000 on the mortgage. After deciding to sell, your agent recommends a targeted marketing campaign to attract families in your school catchment area. Strong interest leads to multiple offers and the property sells for a higher than expected price. At settlement, your conveyancer pays the outstanding mortgage to the bank using part of the buyer’s funds. The remaining balance is transferred to you, leaving you with far more equity than you originally anticipated. That equity becomes your deposit for your next home which puts you in a stronger financial position. Your agent’s ability to negotiate above your expectations directly improves your long term borrowing capacity.

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