A lot of people buy starter homes that serve their needs for a handful of years. But what if you’ve outgrown your starter home and need more space. Is now a good time to buy a larger place to live, or should you stay where you are a bit longer and wait? Here’s what you need to know.
6 Simple Tips to Secure a 1.75% Mortgage Rate
Secure access to The Ascent’s free guide that reveals how to get the lowest mortgage rate for your new home purchase or when refinancing. Rates are still at multi-decade lows so take action today to avoid missing out.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time.
Please read our Privacy Statement and Terms & Conditions.
The challenge of upsizing
Buying a larger home often means spending more money, especially if you stay in the same neighborhood. But here’s why now could be a good time to upsize:
- Mortgage rates are low. If you lock in a new home loan now, it may not cost you as much as it would’ve a year ago.
- Home values have soared. If you sell your home now, you might get a higher asking price than normal, which gives you more buying flexibility. (On the flip side, you may have to spend more on a larger home.)
Should you upsize today, or wait?
Housing inventory is pretty limited these days, so finding a larger home could be a challenge. That said, in many markets, there’s been greater availability of larger houses than starter homes. So if you’re looking to upsize, you may not have such a big problem.
Still, upsizing could mean taking on a larger mortgage, so you’ll need to ask yourself these questions before moving forward:
- Can I swing a higher monthly payment? If your budget is already pretty maxed out, now may not be the best time to add to your housing expenses.
- Have I considered the extra costs? A larger home could mean higher property taxes and heftier homeowners insurance premiums. Plus, it generally costs more to heat, cool, and maintain a larger home, so think through those costs too.
- Can I afford to buy the home I really want? Chances are, a second property may become your forever home. You don’t want to get stuck in a place that doesn’t totally suit your needs, so make sure you can afford the type of home you’ll enjoy for many years.
Do you really need more space?
If your family has grown since you bought your home, or your needs have changed, you may be considering a larger home. But remember, many people have spent the better part of the past year cooped up indoors. So before you embark on a search for a larger living space, ask yourself whether you really need more square footage, or whether you’re just tired of being confined to your house.
You may come to realize that you don’t actually need a larger home at all. Rather, you just need life to get back to normal so you’re not stuck in your house all the time. And getting clarity on that point could save you a lot of money in the long run.
View more information: https://www.fool.com/the-ascent/mortgages/articles/is-now-the-right-time-to-upsize-your-home/