Is it Time to Cash in Your Chips and Upgrade Your Space?

*By Keith Loria
As any homeowner can tell you, space is always at the top of the list when it comes to what homeowners wish they could change about their current home. Whether it’s gaining more of it or having too much that you can’t keep up with it, space has a lot to do with a homeowner’s decision to relocate. In today’s environment especially, as we continue to be in the midst of a buyer’s market with mortgage rates at record lows and inventory piling up quicker than ever, many homeowners are cashing in their chips and upgrading to homes with ample space.
Whether you’ve outgrown your current home, are planning on having more children, have been promoted to a job that allows some financial flexibility to move to a better location with a better school district or you’re simply looking for a bigger space, making the decision to move to a larger home shouldn’t be taken lightly.

Before you make a decision, create a list that includes all the reasons for the change. Are you moving because you want more room? Do you want a better neighborhood? Are you simply tired of your home and want something different? As you make the list, be honest with yourself about the real reason behind the motivation for moving and know what you really want to get out of the move. The last thing you want is to upgrade to a home that doesn’t meet your criteria.

It’s also important to crunch the numbers before deciding on such a big move. While houses are going for less and mortgage rates may allow you to spend more, you still need to look at the numbers closely to make sure you’ll be able to afford all that goes into buying a new house. Remember, a bigger house will most likely mean an increase in taxes and insurance. Your electric, heating and cooling costs will probably rise as well. Be sure to add in extra lawn maintenance and any other amenities that you desire (like a pool) and money responsibilities will quickly add up.

If you’re ready to move thanks to a pay raise, a new job or promotion, make sure your savings can handle a higher mortgage if your job suddenly went away. It’s never a good idea to take on a new financial burden if you fear that there may be downsizing at your company. In an unstable job market, you should be certain that any new position will be there for the long haul.

As with any big decision, it’s important to be realistic. While it’s true that you’ll get a better price on a larger home than you would have five years ago, the house you’re selling is also going to go for less. Make sure you understand the housing market in your current neighborhood so you know exactly what you’re up against. Be realistic with your wants vs. needs as well. Even though you can get a lot more for a lot less today, you still might have to cross that home theater or spa off your list.

When considering the possibility of moving up, you don’t necessarily need to move far away. If you’ve established friendships and a sense of community in your neighborhood, it might make more sense to look for a larger house nearby. This is especially important if you have kids as you’ll need to consider what it’ll be like for them to change schools and leave their friends.

In the end, there are plenty of positives associated with trading up to a bigger house. Before you make any decision though, be sure the move makes sense for you at this moment in your life.

For more information about moving up, contact our office today.

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