How do you know it’s the right time to upgrade?

There are all sorts of reasons for homeowners to contemplate moving to a bigger or more upmarket property, such as the need for more space to accommodate a new home business, growing children or ageing parents, or perhaps just the desire to live in a better area.
But they should not make the leap, says Berry Everitt, CEO of the Chas Everitt International property group, until they have made sure most of the following indicators are positive:
* Income. Upgrading will generally mean a bigger home loan repayment every month. You need to take an honest look at your budget and your employment / salary prospects to see if this would make sense for your family.
* Interest rates. Low interest rates make it easier to qualify for home loans and also mean you can get more house for the same money, so this may be just the time to upgrade. You need to remember, though, that rates can rise rapidly and once again ensure that you will be able to afford the bigger monthly repayment if this happens.
* Credit rating. It is unlikely that your application for a new home loan will succeed if you have a bad payment record – even when interest rates are low and you are earning a good income. So before you go hunting for a bigger or better home, you should consult a mortgage originator to establish whether the banks would regard you as a good prospect and how much they might be prepared to lend you.
* Equity. This can help you to avoid a bigger mortgage payment. If you have built up substantial equity in your current home and are able to realise it when you sell, you can apply this to the purchase of your new home in the form of a chunky deposit.
* Market conditions. In order for you to sell your existing home easily and realise your equity, the conditions in your local market have to be right. You should consult a reputable local agent to find out what the current situation is.
Issued by Chas Everitt International

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