If you have been living in a smaller home for quite some time now, you may be wondering if it’s the right time to upgrade. This is especially true if there’s a new addition to your family or if you or your spouse got a promotion. Positive life changes like these may justify your desire for a bigger house. It is also easy, however, to overlook the challenges that go along with this financial move.
Your budget will play a major role when moving to a larger home. In most cases, if you can afford it and you don’t mind the additional debt, buying a bigger house seems like a wise financial move. Mortgage companies in Tempe suggest that it is still important to carefully examine your financial situation and stability before moving forward.
Mind Your Income
Keep in mind that a new home means a new mortgage payment, moving costs, insurance bill, and property taxes. If you desire a new home but are worried about taking on too much debt, avoid getting a mortgage with a monthly payment (including insurance and taxes) that exceeds one-third of your monthly income. This is to avoid foreclosure or bigger financial hurdles in the future.
It’s Better to Pay More
If you feel ready moving up or are capable of taking more debt, you are sure to enjoy the upsides of a larger home, one of which is improved quality of life. It is, of course, important to pay a larger down payment or monthly mortgage, so you’ll not get tied up in too much debt for a long time. Paying more can mean saving more of your income or trimming back spending in other areas.
You will always have the final say whether it is the right time to upgrade. Financial experts, however, argue that it is not always wise to move to a bigger house located in suburbs. While they may look attractive now, their value may depreciate over time. It is best to choose a not so bigger home in a highly desirable neighborhood. Such homes may not seem attractive like those in suburbs, but they are more likely to gain value over time.