3 Questions To Ask Before Deciding To Upsize Your Home
Upsizing your home is often a necessary move for many families. Whether it is grandma moving in or the need to have room for an office, upsizing is a major deal that could have serious financial ramifications if it is not carefully thought out. Asking the right questions of your realtor and of yourself is important. To help you determine if now is the time to upsize, here are a few questions to start.
What Can You Afford?
Before you step out the door to start looking at homes for sale, you need to determine how much you can reasonably afford to pay each month for a larger home. With a larger home can come greater expenses, including a higher tax bill and more maintenance costs.
Since the last time you borrowed to buy a home, have there been changes to your credit? Small changes, such as buying a car or taking out a student loan, can have a profound effect on whether you are eligible to borrow the funds needed to buy. This can also impact how much lenders are willing to loan you and the interest rate.
What If Your Old Home Does Not Sell Quickly?
One of the unfortunate problems that can sometimes come with upsizing is that the old home does not sell by the time closing day comes for the new home. You could be facing paying two mortgages until you are able to sell the other home. You need to decide now how you would handle the situation.
There are several options available to you. For instance, you could choose to take out a bridging loan from your lender. You could even include a contingency in your purchase agreement that would allow you additional time to sell your home before closing or give you the right to back out of the purchase of the home altogether. Your realtor can help you decide which is right for your situation.
What Is the Resale Value?
Although your focus is likely on upsizing, you should also look to the future. Chances are, you will not need the extra space as your children grow or you retire. Taking care of a large home at that point could be an inconvenience. Therefore, you need to think about the resale value now.
Even though you cannot predict the market with certainty 15 or 20 years down the road, you can look at property now and think about the chances that another family will want to buy it. Factors, such as the neighborhood, amenities, and size can have a bearing on whether you can resale it for a good price later.
Share