Is your home becoming a little more cramped? Maybe it’s time for a new upgrade. But before you do anything brash, here are some things you need to know about a home upgrade.
Are you looking for new and affordable mortgage rates in Guilford? If so, you may need to do a home upgrade. There’s a lot to unpack in this subject, so let’s do it one by one, starting with the reasons you should get an upgrade.
Reasons for upgrading to a new home
An upgrade, in the real estate context, is essentially finding a home that is better than your current one. It can be better in terms of size, price, and quality, among other things. Learn some of the reasons people get an upgrade and see if you fit in any of the following situations:
- Your family is getting bigger. If you have more kids, you’re going to need more space. The same goes when the kids start growing up, and your house may not be big enough for everyone to be comfortable.
- You can afford a new house. Did you get a promotion at work or that substantial raise you’ve worked so hard for? If you can afford a bigger mortgage, it may be time to get a bigger and better home.
- You want a change of scenery. Some people move houses because they want a change of scenery, often moving to places with better opportunities and schools for their kids.
The first steps to upgrading to a new home
1. Determine your down payment
Determine the amount of down payment you can make on the next house. This may depend on the profit you will make from selling your current house, but not all the time. Experts recommend putting in a substantial down payment on the new house so that your mortgage payments will be lower every month, as well as the interest fees.
2. Get pre-approved
Getting a pre-approval will let you know if you can afford the house and gives you an idea of what the payments will be. It’s also a good way to let the seller know you are serious.
3. Search for good deals
Once you’ve determined the budget for your new home, it’s time to look for the best deal on the market. Remember the 36% rule, meaning your monthly mortgage payments (plus existing debt like car and credit card payments) should not exceed 36% of your monthly income. Move-in ready houses also tend to be more expensive, so try asking your real estate agent about homes that are not move-in ready but should be of lower prices.
If you can afford a new house and it’s not going to put constraints on your existing budget, then go for the upgrade! However, always keep in mind the precautions you need to make to avoid falling in a financial black hole or a debt trap. Nevertheless, careful scrutiny of mortgage plans and loan policies, as well as finding the best deal, should you give you that upgrade you’ve been dreaming of.