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If you are in your starter place or living in a temporary home, you might already have, or soon enough will stumble upon this one question: Am I Ready To Move To A Bigger Place? We sat with our Experts and came up with a few ways for you to figure out if you can afford to move to a bigger house.

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5 Signs You Are Ready For A Bigger House

Buying a home for the second time around can be a lot easier, as you’ll have an idea of what you want. Knowing what to expect comes in handy, too. Here’s how to know you are ready to make the big move:

Your Emergency Funds Look Better Than Ever

Your new, bigger house will come with plenty of expenses. Simple upgrades before you move in, repairs, home inspections – the list goes on. Lenders will want to see how you would do financially in case of a job loss or pay cut. All these factors add up to show how essential having emergency funds is before buying a new mortgage. Let’s not forget the need of a decent down payment (likely 20%) if you want to be on the top of your lender’s list for best mortgage terms and interest rates. If you have enough cash in hand, we’ll say you are golden. If not, keep saving until you are absolutely ready. Or, talk to our brokers to help you analyse your financial situation.

Your Credit Situations Looks Excellent

Any lender will usually consider you a safe borrower if your credit score looks exceptional. A good credit score can help you overcome a low deposit, unstable employment history, low savings and much more. Especially for a second home, you will need to prove to a lender that your credit history is better than it was when you borrowed your first home loan. Some lenders still use manual credit assessment to review your situation. Having a clean credit file helps here.
Pro tip: Too many credit inquiries raises a question about your credit. Make sure to keep your inquiries to a minimum. For more tips on fixing your credit rating, click here. If you are unsure of how your credit score looks, here’s a calculator you can use.

Your Savings Outweigh Your Expenses

If you have not been paying attention to your expenses each month, this may be the time for you to do so before buying a new home. Using a monthly budget plan helps you keep track of small and large costs, like car payments, phone bills, food expenses and other daily expenses. While it may not seem like something to pay thorough attention to, it gives you a rough idea of your savings and how much income you’re spending each month. Expect a disaster if you have no idea of your current expenses but are adding a new mortgage payment to the bills.

Your Current Home Yields Enough Equity

The difference between the market value of your property and the amount you have yet to pay on your home loan is called equity. If you’ve been making some extra repayments on your current mortgage over the years or if your property value has increased, then you may be able to access the equity in your current home. If you have built up equity in your current home, this puts you in a better financial situation than you were probably in with your first home loan. You can use this equity as a deposit for your next mortgage and it will assure you a better position than homebuyers looking to buy their first home. Use our mortgage calculators to figure out your borrowing power and repayments once you work out how much equity your current home yields.

You Have Considered The New Ongoing Expenses

A bigger mortgage equals higher property taxes, higher monthly repayments, heavier utility bills and more for maintenance and repairs. Your financial stability with your current home doesn’t convert it to the same with the next one. From repairing a roof leakage to mowing your front lawn, everything will most likely cost a lot more than it does with your current home. If you have considered all these financial forthcomings and are ready to make the jump, it is a sign you are prepared for a bigger mortgage. If your financial plans don’t align with these possible expenses, wait a while before making the move.

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Talk To A Mortgage Broker!

A bigger mortgage might look hefty but our Experts are specialists at handling them. Our specialist brokers will analyse your financial situation and your current living situation to make sure your every step is ensured. Home Loan Experts can help you reach the best possible financial outcome. Give us a call on 1300 889 743 or fill in our free online enquiry form.