Are you in the market for a new home? If your family or lifestyle has outgrown your first home, it might be time to upgrade to a larger home. But how do you know it’s time for sure?
Here are 4 questions to ask yourself before buying a larger home?
1. Can I afford it?
In most cases a bigger home means more money, which results in a bigger mortgage payment.
You may be comfortable with a bigger mortgage payment, but a bigger home also means more rooms, more floors, and more outside space that require cleaning, heating, and maintenance. Plus, if you move up, you will most likely endure higher property taxes (or maintenance fees if you move to a luxury condo).
These are all factors to consider when thinking about your overall budget.
2. What shape are my finances in?
Mortgage lending guidelines always change. Depending on when you got your last mortgage, it may be more difficult in today’s lending environment.
If you want to move up and borrow more, make sure you haven’t damaged your credit since your last home purchase. Be prepared for lenders to scrutinize your income, debts, assets, and liabilities to see if you fall within safe debt-to-income ratios.
3. Should I sell my house?
Unless you’re ready to carry 2 mortgages, most people need to sell before they buy. In an ideal “moving up” world, you will sell your house and make enough profit to cover the upfront expenses on your new home and leave you with enough for a sizeable down payment.
4. How will “moving up” affect my everyday life?
Some additional things to consider when deciding if it’s time for you to move up are:
- School districts in the area if you plan to raise a family
- The distance of your daily commute: will it increase or decrease and how will that affect your quality of life?
- Will you need to switch schools, doctor, dentist, etc?
Research all of this before deciding.
Remember, this is one of the largest purchases you will make. Do your research, and talk to professionals.