What Happens When You Go to Buy Your Next House?
Buying your first home is often a simple, linear process—get pre-approval, find a house, and move in. But when you’re looking to buy your next home, things get a little more complicated. You now have a property to sell, finance to juggle, and timelines to coordinate. It's a bit like a choose-your-own-adventure novel—but with a title transfer and mortgage documents at the end. Here’s what to expect.
Option One: Buying Before You Sell
If you’ve found the perfect new home but haven’t sold your current one, there are two main ways forward.
Make an Offer Conditional on Selling
This is the more cautious path. You make an offer on your next property that’s conditional on the sale of your existing home. It removes the need for bridging finance, but your offer may be less attractive to the seller—especially in a competitive market. It’s also not an option for auction properties, which must be purchased unconditionally.
Make an Offer with a Bridging Loan
Bridging finance lets you purchase your new home before your current property sells. You’ll be making interest payments on both mortgages during the overlap, but this method gives you flexibility and peace of mind.
There are two types of bridging loans:
Open bridging loan: You’ve bought your new home but haven’t sold your old one yet. These usually require you to sell your home within 12 months.
Closed bridging loan: You already have an unconditional sale on your current home. The bridging loan simply covers the period between settlement dates.
Closed bridging loans are easier to get approved as they carry less risk for the lender. If your property has broad market appeal, an open bridge may still be viable—but be realistic about how long it might take to sell. Some homes may take longer to shift due to location, construction type, or title restrictions.
When thinking about the cost of a bridging loan, remember to weigh it up in context. If the bridging interest costs you $20,000 and the house you’re buying is $1.2 million, ask yourself—would you have paid $1.22 million to secure the home outright? If yes, then that extra cost may be worth the convenience and certainty.
Option Two: Sell First, Then Buy
This is the simpler and safer strategy. Once your home is sold, you’ll know exactly how much deposit you have and can move ahead with a pre-approval for your next mortgage. You’ll avoid the cost and stress of a bridging loan, but you may need to find temporary accommodation if your ideal next property isn’t immediately available.
Pre-approval works the same way as before. The lender will want to see your deposit (from your home sale or other sources), proof of income, and will factor in any other debts. Your approval will typically last 60-90 days, and can be extended with updated documentation.
Recalibrate Your Budget and Criteria
Buying your next home means your financial situation and goals may be different from when you bought your first. Your family might have grown, your income changed, or your lifestyle priorities shifted. Reassess your budget, your borrowing power, and your property must-haves. Do you need a bigger home? A different school zone? A shorter commute?
Due Diligence Still Matters
You may be a seasoned homeowner now, but don’t skip your homework. Revisit your due diligence checklist:
Order a LIM report and building inspection
Check the property title
Review the sale and purchase agreement
Confirm insurance availability
Your mortgage adviser and lawyer will guide you on whether your offer should be conditional or unconditional. Auctions always require unconditional bids, so ensure all your checks are done in advance.
After Your Offer Is Accepted
Congratulations—again! If your offer is unconditional, you’ll be paying your deposit (typically 10%) right away. If conditional, you’ll work through the conditions within the agreed timeframe. Once confirmed, your deposit is due.
Preparing for Settlement
A quick refresher on what happens next:
Early on:
Provide your IRD number and ID to your lawyer
Arrange home and contents insurance
Consider reviewing your life and health insurance policies
Two weeks out:
Meet with your broker to confirm your mortgage structure
Lock in interest rates if needed
One week out:
Sign the loan documentation with your lawyer
Set up new accounts with the bank
Two days before:
Do a final pre-settlement inspection
Transfer your cash contribution to your lawyer
Settlement day:
Your lawyer completes the transfer of funds
The agent hands over the keys—welcome to your new home!
Post-settlement:
Check your mortgage account is correctly set up
Talk to your adviser about refixing, restructuring, or top-ups down the line
Whether this is your second property or your fifth, the right advice and preparation can make all the difference. Your mortgage broker is there to help at every step—through the paperwork, the what-ifs, and the excitement of moving day.
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