Deciding to move to a new home is an exciting time for the whole family. You get to move into a bigger place which will have a lot more space for everyone. However, it does mean you have to get a new mortgage. It can be a costly time with payments being higher for a larger home. There may also be issues when trying to end your current mortgage. Here are a few things homeowners wish they thought about this before getting a new mortgage.
How much can I afford to pay?
One thing you need to think about before getting a new mortgage is how much can I afford to pay? You don’t want a new mortgage which will send you spiraling into debt as you can’t afford the monthly repayments. You need to ensure you can afford the new mortgage before you decide to take it out. Look at everything you currently pay for, so you know how much needs to be set aside for bills every month. That way, you know if you can afford to take a larger mortgage at this time.
What will happen if I can’t pay the new mortgage?
Another thing homeowners need to think about before getting a new mortgage is what will happen if I can’t pay the new mortgage? You need to have a savings account in place which will cover the mortgage for a couple of months if something does happen. You never know when you may lose your job and will struggle to pay for your mortgage. You should talk to your bank about this, so you know where you stand if you do come under financial strain.
How long will it take to sell the old home?
An additional thing homeowners need to think about before getting a new mortgage is how long will it take to sell my house? You want your old home to be sold before getting a new mortgage. You might have more money to put down as a deposit on the new mortgage than you originally thought if you sell for a high price. You also don’t want to have the pressure of still having to sell your old home, while paying out for a new mortgage. Therefore, you need to ensure you get your old home on the market as soon as possible. You may be able to get a buyer quicker by looking for an investor instead or considering selling your home for cash.
How long am I planning on living here?
Another thing people wish they had thought about before getting a new mortgage is how long am I planning on living here? You need to consider this before choosing how long you want to take the mortgage out for. If you think you will be living there a long time, you might want to get a long repayment period which will also knock down the cost of the payments. You also need to consider how long you will live there as you might want to take a fixed rate for three or five years. That way, you will just pay one specific amount for a number of years.
Remember that you will need to consider the cancellation fees for your old mortgage. You may have to pay a fee for ending early.