Don’t get caught in a financial trap when upsizing—here’s how to avoid it.

 

When it comes to upsizing your home, timing is everything. If you're currently in a smaller home and looking to upgrade, the idea of managing both the sale of your current home and the purchase of a new one can seem daunting. Add the potential for fluctuating real estate prices and mortgage rates, and the stress can quickly build up. However, with the right strategies in place, you can upsize without putting your finances in jeopardy. In this article, we'll explore how to time your home sale and purchase effectively, ensuring that the process is financially stress-free and seamless.

 

Start with a Clear Financial Plan

Before diving into the search for your dream home, it's essential to have a solid financial plan. Consider the following:

  • Determine Your Budget: Take a close look at your current financial situation, including your income, expenses, and savings. Factor in your current mortgage, potential new mortgage rates, and any additional costs associated with upsizing (e.g., closing costs, moving expenses, etc.).

  • Down Payment Considerations: The larger the down payment, the lower your monthly payments will be. If possible, aim to put down 20% or more to avoid private mortgage insurance (PMI) fees.

  • Pre-Approval: Talk to your lender to get pre-approved for a loan before starting your home search. This will give you a clear picture of what you can afford and help you stay within budget.

 

Sell First or Buy First?

One of the biggest challenges when upsizing is deciding whether to sell your current home first or buy your new home first. Both options have their pros and cons:

  • Sell First: Selling your home first allows you to have the funds available for a down payment on your next home. It reduces the risk of carrying two mortgages at once. However, the downside is that you might need to move into temporary housing while you wait for your next home to close.

  • Buy First: Buying first offers the convenience of securing your next home before selling. This can be a great option if you find the perfect property. However, the downside is that you may be stuck carrying two mortgages until your current home sells. To minimize financial stress, it's crucial to have a strategy in place for covering both mortgages in the interim.

 

Be Flexible with Your Move-In Dates

Flexibility is key when it comes to timing your move. When selling and buying at the same time, you may encounter situations where closing dates don't align perfectly. If you're able to be flexible with your move-in dates, you may be able to negotiate temporary housing, rent back agreements, or extended closing periods. This flexibility can relieve some of the pressure and help you avoid rushing into a decision that could stretch your finances too thin.

 

Keep an Eye on the Market

Timing the market correctly can significantly impact your financial situation when upsizing. If you're in a seller's market, where demand for homes is high and inventory is low, you may be able to sell your current home for a higher price. On the flip side, if you're buying in a buyer's market, you could negotiate a lower purchase price for your new home. Working with a Realtor in Burbank who understands the local market trends can help you make informed decisions on both the sale and purchase sides.

 

Build an Emergency Fund

Even if you’re financially prepared for the move, having an emergency fund is always a good idea. Unexpected repairs, moving costs, or other financial challenges can arise during the upsizing process. Having a financial cushion will ensure that you can handle these surprises without stressing about your finances.

 

Conclusion:

Upsizing your dream home doesn’t have to come with financial stress. By developing a clear financial plan, carefully timing your sale and purchase, being flexible with your moving dates, keeping an eye on market conditions, and building an emergency fund, you can make your dream of upgrading to a larger home a reality—without the financial strain.

Ready to make the move? Contact me today and let’s talk about how we can start your upsizing journey!