Life doesn’t always turn out the way you plan, and when the unexpected comes along, you may need to readjust your plans to make sure your home continues to fit your needs. Maybe your family has expanded or your kids are growing up and need more space. Maybe you bought a house when prices were low and wages were tight, and now that you’ve got some equity and higher income you can now afford to upgrade your standard of living. If any of those scenarios sound familiar, it might be time to upsize your home. But is expanding right for you? Read on to learn more about the pros and cons.
Upsizing is great…
You probably don’t need anyone to tell you that a bigger house in a nicer neighborhood would be fantastic. But there are really strong arguments to be made for upsizing that might not be as obvious. For example, you may not actually want more square footage. One way to upsize without getting a giant house full of rooms you might not need is to look into adding outdoor space. Some homes have gorgeous patios, outdoor kitchens and even wood-burning outdoor pizza ovens.
Another alternative to upsizing your space is to move into the home of the future. That Cape Cod or Queen Anne you’re in right now might be beautiful, but is it built for the 21st century? Are the speakers built into the walls? Is it set up for home automation?
Baby Boomers have been upsizing their homes at a surprising rate, often moving into larger homes for retirement. Usually, people move into larger homes because they want the space and retirees presumably have an empty nest. Moreover, as we get older, it can be harder to lug a vacuum up the stairs or commit to mowing an enormous lawn every weekend.
But Boomers have learned the value of luring others over, often choosing houses on artificial lakes or in gated communities with kid-friendly amenities. Suddenly, the big house is a blessing, because there’s room for everyone at Thanksgiving! If you want to cut down on your travel time or increase your hosting duties at social events, a bigger house might just be the ticket.
…but maybe not?
You’ve been through this before, when you bought your current place. Buying a home is a little tedious and can be expensive. It’s important to consider the financial impact upsizing can have on your budget. For instance, your monthly mortgage payment will be higher than your current payment. You’ll want to make sure you’re able to afford this increase comfortably by closely comparing your income and expenses.
Additional expenses may also come up like having to buy new furniture to fill up your bigger home or being required to buy Private Mortgage Insurance (PMI). PMI protects the lender from loss if the borrower is not able to make payments. Many lenders require PMI when the loan-to-value percentage is greater than 80 percent.
Some changes may not cost you more money, but may affect your decision to move. For example, your kids may have to go to a different school and you’ll have new neighbors. This could be a downside to moving if your kids like their school and you get along with your current neighbors.
After weighing some of the cons you might be wondering why you’d ever go through the home-buying process again. The good news is that it’s not going to be that difficult this time. You know what you’re doing and you should have fewer surprises. You’ve got the down payment set up through the equity in your current home. And if you’re already financing through Partner Colorado, a new loan approval will be fairly quick and easy. If you need help determining which mortgage term is right for you, use our Mortgage Comparison Calculator and see the difference between a 15-year and 30-year mortgage.
If you’re ready, to upsize your home, give us a call. If you don’t know if you can afford to upsize, give us a call anyway. Our home loan specialists can help you figure out if upsizing is the way to go, help you build a budget, or show you our construction and remodeling loans if you’re looking to upgrade your new home before you move in. Right now, you can take advantage of our Home Equity Line of Credit (HELOC) with no closing costs, one of the lowest rates available, plus a new rate lock option. Visit our website for more details or contact our Total Solutions Contact Center at 303.422.6221.