Even if you thought you were going to stay put in your home for a while, these days, “forever homes” don’t really mean forever. In fact, the average American is expected to move over 11 times in their life.
If you’re on the fence about whether or not to sell your home and upgrade in the near future, we’ve compiled a list of hard-hitting questions for you to have a little real talk with yourself and help you decide whether a move makes sense for you.
Question #1: Why do you want to upgrade?
When you’re trying to decide whether or not you’re ready to sell your home and buy a new one, the first question to ask yourself is why you want to move in the first place.
Be honest with yourself here. Not only will it help you decide whether moving is a good decision for you right now, but if so, it will also help you become much clearer on what your goals for your new home will be.
People move for all sorts of reasons, so there’s no wrong answer here. However, if you’re not quite sure how you feel, here are a list of questions to get you started thinking:
- Are you still satisfied with your home’s location? (Your commute to work, school, nearby shops, etc.)
- Are you growing your family? Do you need more space?
- Are you looking for an upgrade that’s impossible to bring to your new home? (A bigger backyard, access to public transport, etc.)
- Are you looking for a change of pace? (i.e. Living in the city vs. country)
- Is something about your home no longer suiting your needs?
- If so, what do you need?
Question #2: Will you get the value you need?
The next piece of the puzzle to consider is whether or not selling your current home will bring you the money in order for a move to make sense.
Most homeowners, especially those looking to sell their first home, won’t have paid off the mortgage entirely, so you’ll have to look at how much you still owe vs. how much you can expect for a sale price.
You can use a mortgage balance calculator to find out how much you still owe on the home. Just enter some information about the original interest amount, your interest rate, the loan term, your monthly payment, and how many payments you’ve made thus far. Then, it will give you the current balance on your loan.
Treat that number and above as a goal for your home’s sale price.
After that, you’ll want to get a realistic look at how much you’d get in a sale. Use Open Listings to search homes for sale in your neighborhood to see how much they’re going for in your current market.
Here, you’ll want to focus only on comparable homes that are similar in size, condition, and location to your own.
The bottom line: If asking prices for homes similar to yours are at or above the amount you currently owe on your mortgage, it may make sense to sell and upgrade now. If not, you may want to wait and pay down more of your balance first.
Question #3: Can you handle a bigger financial commitment?
The next question may seem obvious, but it bears serious consideration before taking the plunge.
If you’re looking to buy a bigger home with more upgrades, it’ll come with a cost. So, you’re more than likely going to have to pay a premium to get a home that suits your current needs. Are you ready, willing, and able to make that happen?
If you want to get a sense of how much a move will cost, search for homes that meet your current needs. Look at how much they cost, and use their asking prices to come up with a range of how much you’d realistically need to spend.
To take things a step further, you can put that amount into a mortgage calculator to get a feel for what your monthly payment could be.
However, keep in mind that your monthly mortgage payment isn’t the only cost of buying a bigger home.
There’s also the down payment (anywhere between 3.5-20% of the sale price), closing costs (another 1-2% of the sale price), moving expenses, property taxes, and ongoing home maintenance costs ~ all of which will likely be costlier with a bigger home.
You’ll want to take a long, hard look at your finances to see if you can handle these costs right now.
Question #4: Are you willing to make a change?
Our final question is aimed at determining how badly you really want to make a move and if the benefits of moving outweigh the disadvantages.
Most of the time moving means making a compromise.
Rarely will a new home check off every single box on your wish list, so you may have to stay flexible. You may have to move out of your current neighborhood in order to be able to afford a house with enough space. Or, you may need to buy a house that needs a lot of TLC in order to buy in a great location.
Whatever you’re biggest compromise may be, picture yourself having to make that change.
Is upgrading worth that compromise in your eyes, or would you rather stay put? ?
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