There are many reasons for upgrading to a bigger home; whether it’s because you’ll want more space to accommodate your growing family, have a larger yard, or to make room for a home business.
When it's time to trade up from your current home into something larger, it's important to carefully choose a home that will meet your needs for many years to come. A good rule of thumb is to buy a home you’ll live in for at least five years.
Why Do You Want a Bigger Home?
Before shopping for your dream home, it's a good idea to consider your reasons for upgrading. Instead of buying a home based on its size or because it's affordable, consider the features you need and what your current home lacks. Think about what you wish you could change about your current home. You may be looking for:
- More bedrooms / bathrooms
- A better layout, such as a master bedroom farther away from kids' rooms.
- A larger yard for kids to play or for entertaining
- A laundry room on the top floor
Set Your Budget
It's important to start with a realistic budget before you begin your home search. Make sure you know how much you can afford to borrow and what you can afford to pay each month for mortgage payments and other additional costs. Many home buyers underestimate the cost of a larger home because they don’t consider all the additional costs involved. Don't forget - you may be dealing with more than just a higher mortgage payment. You will also pay more for utilities, home insurance, property taxes, landscaping and maintenance. Furnishing your new home is another expense often overlooked when upgrading to a larger living space. It will mean buying new furniture to fill the extra space you didn’t have in your old home, or to match the décor of your new home.
Map Out a Plan
Once you’ve determined what your budget will be, consult the right people to help you develop a plan for buying your next home so you can start your home search knowing exactly what you want and how to get it. Discuss loan options with a lender as you may need to be qualified to carry two mortgages - even if it's just for a short period of time. You may also need to consider a bridge loan if you buy a new home before your current home sells.Speak with your realtor who can provide information on how the process will work. Unlike when you bought your first home, selling your current home and buying a new one will make the home buying process a little different this time around. They will also be able to provide insight into the local real estate market, provide comparable homes that are already on the market, and possibly tell you how long it will take to sell your home.
When Should You Sell?
In your plan, it will also be important to consider when exactly you should sell your home.If you are like most homeowners, you need to sell your home before you buy a new one. The safest option is waiting until your current home sells before shopping for a new house. This option increases the likelihood that you’ll need to find temporary housing if you need to move from your old house before you’ve found your new one.If the purchase of your new home is conditional on the sale of your own, this has the potential to put you in an awkward position. You could feel pressured to accept a lower price on the sale of your home in order to remove the conditions on the purchase of your new home.Consult with your realtor to determine which option is best for you.