Buying your first home is a big deal, but that first home is rarely your dream home. After several years, you might start thinking it’s time to upgrade for more space, a nicer neighborhood, more luxuries, or all of the above. Here are a few questions to help you make the big decision before you call your real estate agent.
Can you handle a larger mortgage?
The most important question to ask is whether or not you can handle the larger mortgage that comes along with a nicer or bigger house. Create a budget for the potential new mortgage payment along with all the other costs that come with a new home such as possible HOA fees or higher electric and gas bills from heating and cooling a larger home. If you can make it work—you can proceed to ask the other important questions.
Can you afford moving costs?
You might be able to afford the cost of your new mortgage, but can you afford the upfront costs of moving. Moving means paying for movers, buying new necessities for your house, and tons of other little costs that come with moving. If you have the extra income, you are probably in good shape.
Can you sell your current house?
As much as you want to get into a new home, it might not be a great time to sell your current home. It could be a downturn in the market or little interest in a house that needs some serious upgrades. You could be in a worse financial situation if you end up getting less than what you ask for, so be sure your house is sellable.
Why do you want to upgrade?
You should be upgrading for the right reasons. If your reason is you don’t like your bathroom—maybe it would be worth looking into remodeling your current bathroom. If your family has outgrown the home or you have moved up in your life and career, maybe it’s time to seriously think about getting that dream home.