Your home seems to keep getting smaller and smaller. A growing family and a changing lifestyle make it easy to outgrow a once-perfectly sized home. Whatever the reason, you’re looking to purchase a bigger home. Here are 5 things you should take into consideration before making a commitment:
1. Figure out exactly what you don’t like about your current home
Whether the kitchen is too small or you have more kids than bedrooms, take the time to analyze exactly what is making you unhappy in your home. Being more aware of these issues will propel you into the right direction towards finding the house of your dreams.
2. Sell before buying
Unless you want the possibility of getting stuck with two mortgages, sell your house before buying a new one. This allows you to get some of the down payment money for your new home from the sale and provides an idea of how much more you need.
3. Think about extra costs
Obviously, a bigger house takes a bigger hit on your wallet. According to Investmentzen.com, the purchasing price of a new home is typically $84/ square foot. Will you need to purchase additional furniture to fill the bigger space? The cost to fully furnish a home is typically 20% of the home price and closing costs are around 3.5%.
4. Look into qualification requirements
If you’re purchasing a home with a price over $425,000 you will need to apply for a jumbo loan. A jumbo mortgage is a home loan that exceeds the conforming limit set by Fannie Mae and Freddie Mac. Qualifying for a larger mortgage requires stricter credentials. Talk to a Union Home Mortgage loan officer to discuss your options.
5. Understand your long-term plan
Could you see yourself here for the next 30 years? Is this a home you could potentially be interested in selling once the kids move out? Looking into your long-term future plans gives you a better idea of whether the idea is financially right for you.