The prospect of selling your current home and moving can be daunting. If it’s been a while since you last moved, one of the most important questions to figure out is how much you’ll need to spend on your next home.
Even if you’re just at the “thinking about it” stage, it’s important to figure out. After all, your budget is going to influence your decision.
The first step is to determine the maximum you can spend. This involves adding the money you’ll get from the sale of your current property after repaying your outstanding mortgage to any other funds you have available, plus the maximum amount of mortgage that you qualify to receive.
Of course, just because you may qualify for a large mortgage doesn’t mean that you want those bigger payments. In fact, I would rarely recommend purchasing something at the very top of your budget. So, the second step is to decide your needs. What features are a must in your next home? For example, you might want at least four bedrooms and anything less would be a deal-breaker.
Next, make a “must-have list.” You can use this list to find a baseline of properties on the market that fit this list, and their average asking price. This will give you an idea of what it may cost to find a home that meets all of your needs.
Third, think beyond your needs and consider your wants. These are features that might not be deal-breakers if absent, but you’d sure love to have them in your next home. They could be a large modern kitchen, a desirable neighbourhood, or the like. Ask yourself how much would you be willing to pay for those desirable features. $20,000? $50,000?
The final step is to do some research to see what properties are available that include your lists and this will give you a good idea as to how much your next home might cost. If you feel like you are prepared to take the next step, contact me to get the ball rolling!