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    Step-by-Step Guide to Buying a Bigger Home

    You’re smart. You did it right. You got a starter home and it’s been a great place to live and grow your family. But now your family has outgrown the house. You got dogs, so you need a bigger yard. You had children, so they need their own rooms and space to play. Or you’ve gotten married (congrats!) and are consolidating households, all of which means more people and more possessions. Maybe you’ve gotten to the point where you have become your own boss and you want a home that also has space for your business. Or you’ve done it right because you worked hard, you’ve grown a successful business and you’re looking to upgrade your residence by buying a bigger house.

    While you’re thinking about which neighborhood to move into and which open house to go to, now’s the time to take everything in stock. You’ve been managing your home loan and household expenses, but remember when you’re looking at a bigger home, you’re also going to get a bigger mortgage and even more household expenses. Now’s the time to take a good, hard look at your finances. How are your finances since you last bought a home? How is your debt-to-income ratio? Have you suffered any hits on your credit score? How are the interest rates?

    Just because you’re looking at a bigger home doesn’t mean you need to spend more than you can comfortably afford. The 25 percent rule, spending no more than 25 percent of your monthly budget on housing, applies to a big house just as much as it applies to a smaller home. Plan to put at least 20 percent for a down payment because anything less increases your costs.

    Assess Your Expenses

    In general, here are the expenses you need to consider:

    • Mortgage rates and payments
    • Insurance
    • Taxes
    • Utilities
    • Maintenance
    • Furnishings and decorations (remember a larger house means more of each!)
    • Landscaping

    Remember, a larger home will cost more to insure. A general tip is to pay $35 per month for every $100,000 of a home’s value. Even though you have homeowner’s insurance for your current home, it’s a good idea to shop around and ask about bundling when you’re considering upgrading your home to get the best deal.

    Also, a larger home will cost more in utilities. According to the U.S. Department of Energy, a typical family spends at least $2,200 per year on energy bills. That’s bound to increase as you increase the size of your home. Just because you’re upgrading your home doesn’t mean that it can’t be energy efficient. Builders have designed net-zero-energy homes and use building materials as well as designs that are created to be as efficient and use less energy. Plus, there are always options such as solar panels, tankless water heaters, Energy Star appliances, LED lighting and xeriscaping that you might want to consider to help with those utility bills.

    Time and Money

    Not only do bigger houses come with bigger expenses, but they also take more time and effort to keep up, so remember to factor that in. In general, estimate maintenance costs at about 1 percent to 3 percent of a home’s initial value. Will you need to hire landscapers, pool cleaners or household staff? If you’re going to do it all yourself, will you need better equipment and do you have the time?

    One good suggestion is, while you’re in the planning phase, create a budget for your bigger house and before you buy one, live with its expenses for six months, budgeting your money accordingly. It might seem like a chore, but it will prepare you for your new house long before you turn that key and move in.

    Sell Your Home

    You’ll also want to assess whether your current house will sell, if you are going to sell it into order to buy your bigger home. How is the market in your city for a house like the one you own? Of the houses for sale, which ones are selling? How much profit can you make from selling your home compared to the expenses (closing costs, down payment, cost to hire movers)? In some cases, it might be wise to sell your current home before you buy another one. Even if you have to rent another home, it’s often better than managing two mortgages at once. Avoid the temptation to overprice your home when you put it on the market. What you really want is a bidding war, drawing in multiple offers so you have more options when it comes to choosing your new home.

    Give Me Space

    And, of course, you want to consider the people (and, in many cases, animals) who are going to be living in this new home. How much space do you need? How many bedrooms and bathrooms? What recreational space will you require or what are your entertainment space needs? Perhaps you are buying a new home because you want to entertain more. Perhaps you want to have more room to accommodate out-of-town visitors, so you want guest rooms instead of bunking guests on the living-room couch or kicking the kids out of their rooms during a visit.

    Depending on where you live, you might want to expand your outdoor living space. And what will your future space needs be? If you have elderly relatives living with your or if this is going to be your home during your elder years, you need to factor in accessibility issues.

    Planning Is Key

    If you do your homework, you’ll be ready to move into your bigger home in no time. Here at RJ Homes Real Estate Group, we specialize in finding the right home for you at the right time using our exemplary level of service and extensive local knowledge of the Greater Tucson area. Contact RJ Homes today to get started!

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