If you’ve set your heart on upsizing, it’s essential to put the basics in place or risk disappointment.
You should be clear not only on the goals you wish to achieve by upsizing to a larger home, but also the amount of money you can spend to do it.
As an experienced local agent, I always tell my clients that upsizing is more than just moving to a larger property.
You need to be clear on whether you want extra living space, or more bedrooms to accommodate a growing family or a larger garden with a pool and entertaining area. If you go into a purchase without this clarity, you risk making an expensive mistake.
The constraining factor, of course, is finance. You should work with your bank or mortgage broker to set a spending limit. This way, you’ll be able to avoid wasting weekends looking at homes beyond your reach and limit your search to properties you can afford.
Below is a quick list of actions to take as you consider how best to upsize.
- What equity do you have in your existing property? – This is a critical factor in determining your level of borrowing to upsize. A quick call to your bank or lender will give you the latest total that you owe on your mortgage.
- How much is your home worth? – The first step to upsizing is to get an appraisal for your current home. An appraisal will give you a good idea of the price your home might achieve and discuss homes that are on the market and suitable for your needs.
- Calculate your spending limit – Work with your lender, or mortgage broker, to set your spending limit. It’s a good idea to have your bank commit in writing to the total loan it will provide, as this will help you to organize your finances in the event you need to move quickly to beat rival buyers or bidders on your next home.
- Do you have the ‘extras’ covered? – You’ll need to factor in taxes, inspections and legal fees, a possible bridging loan and increased insurance costs for a larger home.
- Can your cash flow take the hit? – Don’t underestimate the additional cost of owning a larger house. You’ll be paying more taxes and rates, as well as facing larger utility bills. Is that all manageable?
- Is remodeling a better path? – That’s always a possibility. But I’ve yet to come across a project that stayed on budget and didn’t stress-out the owners. When you upsize, you’ll know your costs when you buy.