Although many people buy a home thinking they will live in it forever, the facts say otherwise. Whether you are outgrowing your current space, dealing with a job transfer or relocation, or simply looking to upgrade for quality of life (or maybe because your income has grown since first purchasing your starter or current home), you should ask yourself these questions to see if you are ready to upgrade to a new home in Central Florida. We want to ensure you make the right decision for yourself and your situation.
Can I afford a new (or bigger) home?
A bigger house usually means more money and not just when it comes to the costs you pay upfront. Bigger homes often mean bigger expenses when it comes to ongoing care and maintenance. More space means more money spent on utilities as well. More lights left on and a bigger space to air condition in the summer months (especially when upgrading to a bigger home in Florida!) or heat in the winter months (maybe not so much in Florida) means bigger utility bills, too. Looking at the money you have to spend on these is important when considering upgrading your home. An upside of a newer home, if that is what you are looking for with your upgrade, is that newer also usually means more energy efficient when it comes to new systems such as the air conditioning unit, water heater, dishwasher, etc.
Am I outgrowing my current home?
When you bought your first home, maybe you were single or it was you and your husband and your dog. Now, ten years down the road, maybe you’ve added two kids and a few more pets to the mix, and your house may seem to be busting at the seams when it comes to your living space. Or maybe you want space for a home office, craft room (gotta have somewhere to create all those Pinterest-inspired projects), or a man cave (what man doesn't want one of these?!). If this is the case, it may be the right time to start considering a new home.
Where do I stand with my current home?
The longer you have lived in your current home, the more equity you should have in it. If you have at least 20% equity in your current home, you can use it as a down payment on a newer, larger home. Remember, the more you put down, the better financial situation you will create for yourself in the long run. If you can put 20% down on your new home, you can avoid the extra expense of paying for Private Mortgage Insurance (PMI)—a major money-saver for you! Having the funds for a down payment and closing costs is an important factor to consider.
Do I have my finances in order?
Remember—your income and debts will be reviewed by your lender to be sure you don’t exceed your maximum debt-to-income ratio. Just because you are busting at the seams in your current home doesn’t mean that your bank account is busting at the seams with cash. Whether it is that lingering college debt, unexpected medical expenses, that fancy new car you just "had" to have, or growing your family—all of these things could have an impact on a lender's willingness and ability to finance your new home. If you’re in over your head in debt, it might not be the right time to upgrade.
Will my current house be able to sell?
Looking at the real estate market and comparing your house against the competition is the first step in knowing if now is the right time to sell. This goes along with our last question in regards to the mortgage status of your home. If you are upside down in your current mortgage or have little wiggle room when it comes to the amount of equity you’ve built up, it can make it that much harder to consider upgrading to a new home. However, don't be fooled into thinking a "Zestimate®" or anything like it really represents the true value of your home. These are just marketing tools used to sell ads on websites and do not have statistical credibility. A competent REALTOR® can analyze your home and the competition and provide you with a no-cost, no-obligation market analysis that takes the unique features of your home, location, and market into account.
If you were able to answer yes to all, or a majority, of these questions, then you are probably in the perfect position to upgrade from your current home to a bigger home.
