Have you established significant equity in your present home? Review your yearly mortgage statement or contact your loan provider to help you determine your equity. Typically, a homeowner doesn’t have much equity during the initial years of mortgage since the much of the monthly payments goes to the interest. It usually takes 5 or more years before a homeowner will have sufficient equity or unrealized gains.
Do you have a higher income or better financial standing? Make sure your current income will also match the higher mortgage payments for the new home as well as enough to cover moving costs. Are you ready to leave your present neighborhood? In most cases, the neighborhood where your first home is won’t be the same neighborhood you would want to live in until retirement. Certain circumstances such as having school age children might make you want to move to a neighborhood closer to the school district or changing jobs may make you want to move closer to your new job.
Can you remodel or renovate your present home to make it bigger? Sometimes all you need to make your house bigger is have it remodeled or adding a new room or another floor. But if your current property doesn’t have enough space for an expansion or your municipality does not allow it, or if you just don’t want to spend time and effort in renovating, then moving will be the best choice.
Does the present housing market fit your needs and budget? If the market in your neighborhood is hot, you can sell your home a lot faster and at a very good price, but the downside is the new home you will be
buying will also cost a bit more. On the other hand, if the market is slow, it may take longer to sell your home, but the advantage is you have more choices at lower prices as you shop around for new homes .
How are the interest rates? A lower interest rate means you could easily buy a bigger home and also makes it easy for you to find a buyer for your current home.