Is your current home starting to feel cramped? Are you ready to move to a bigger property?
Selling your first home and buying a larger one can be challenging. Here’s a handy guide to help you get started.
Is it really time to upgrade your living arrangements?
If you’re expecting children or have taken in pets that require a bigger play area, you might be tempted to consider a larger house to improve your quality of life. If you’ve been promoted, a better neighborhood might mean not only more space to live in but also a happier life.
Before you set your mind on trading up, ask yourself these questions:
Can you afford a bigger home?
Can you handle a higher mortgage? How will larger square footage affect your monthly budget? Will you need high-end amenities and upscale interior design? Will you need to hire household help? Create a budget for homeownership costs and mortgage payments to help with your decision.
Can you carry two homes?
Can you handle carrying two mortgages while you’re waiting for someone to buy your current home? Should you rent your old home to earn a passive income?
Are your finances stable?
Review your assets, liabilities, and debts to make sure you have a reasonable debt-to-income ratio. Review your credit score, as well, because it affects your eligibility for a loan and the interest rate you’ll receive.
Before you buy a bigger house, try living with a “big house” budget for six months. Allocate a monthly budget equivalent to the estimated costs you’ll incur when you make the move. If you’re left with enough money to feel comfortable, you’re ready for a bigger house.
The Process of Moving Up
Now that you’ve made up your mind about trading up, it’s time to start house hunting and preparing your current home for sale.
Step 1: Getting an Agent
Select the right agents to help you determine the available move-up properties and the new mortgage payments. Your agent will also compare your potential rental and selling income to help you decide whether to rent or sell your old home.
Step 2: Looking for an Excellent Deal and Financing Options
Never get a house whose monthly mortgage will eat up too much of your income. To pay off your home after, consider signing up for a homeownership program. If you’re moving to another state, remember that programs differ in different states—the terms for down payment assistance in Rio Grande Valley isn’t necessarily the same in Bismarck.
Step 3: Looking at Listings
Browse through listings and find a home that fits your budget and lifestyle. Research about the neighborhood and see if it’s near your workplace, your children’s school, and facilities like hospitals and malls. Have your agent schedule a visit to better visualize what it’s like living in the property.
Step 4: Preparing Your Old Home for Sale
Get serious about selling by moving out so your agent can stage your home for sale. If you can’t move out yet, at least, declutter and fix any issues in the house before listing the property.
Some issues you need to address are:
- Improving your curb appeal
- Fixing the interiors of your home
- Making the home look more inviting
- Plumbing, roofing, insulation, and other problems
There’s something unquestionably luxurious about moving to a bigger house. However, it’s not always cost-effective. Make sure you have your finances ready before you make the trade-up.