Consider the Full-Spectrum.
Ask yourself these questions to help you decide whether youâ€™re ready for a home thatâ€™s larger or in a more desirable location. If you answer yes to most of the questions, itâ€™s a sign that you may be ready to move.
1. Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you donâ€™t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if youâ€™ve owned your home for five or more years, you may have significant, unrealized gains.
2. Has your income or financial situation improved? If youâ€™re making more money, you may be able to afford higher mortgage payments.
3. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that youâ€™d like to be closer to your job or live in a better school district.
4. Are there reasons why you canâ€™t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. If youâ€™re simply not interested in remodeling, then moving to a bigger home may be your best option.
5. Are you comfortable moving in the current housing market? If your market is slow, finding a buyer may take longer, but youâ€™ll have more selection and better pricing as you seek your new home.
6. Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer. There are still down payment assistance programs available to help First Time buyers buy your home.
7. Can you afford a Higher Mortgage Payment? The fact is with housing prices and interests dropping, you may be able to have a larger home with a similar payment to what you have now.
If you've answered Yes to the majority of these questions, your next step is to talk to a lender and find out what you can qualify for. A Realtor typically has Mortgage lenders they can refer you to. After a Pre-qualification, talk to a Realtor about what larger homes in your desired area are selling for to determine if you can make a move up now. This information is usually offered Free.
Author: Jill Berni, Realtor/Broker
Oak Tree Real estate Services