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How to Know You’re Ready For a Bigger House

How do you know if you are ready to move into a bigger house? Read about the factors to consider before making your move.

How to Know You’re Ready For a Bigger House

What to Consider Before Moving Up

 Begin by answering an honest question: Can you afford it? Whether your target dwelling is a larger apartment or house, or a better neighborhood or city, bigger and better usually means more money. You are likely comfortable with your current monthly payment if you are feeling ready to take on more. But, does your budget have room to handle the increased payment? Not to mention the increased taxes, utility and maintenance expenses, along with the additional time it will take for cleaning and upkeep.

Something else to consider, in case you want to move to a larger city, is the increase in the cost of living. Generally, the price of fuel, groceries, transportation and city utilities are higher in larger cities. Cost of living calculators can help you research how far your dollar will go for the city/cities you have in mind. 

The bottom line is you should get a solid grasp on how all these factors will affect your budget. Maybe you have saved for years or have recently come into money, and taking the plunge is of zero concern. Then again, maybe you are thinking about the sacrifices you are willing to make (like fewer vacations or eating out less) in order to upsize. Our recommendation is: Create a budget representing your increased monthly expenses and put your pocketbook to the test before moving forward with the idea of moving up.

Next, you will want to make sure your finances are in good shape. Depending on when you last rented or purchased a home, proving you are credit worthy and qualifying for a mortgage may have changed. Specifically, it may be harder than you recall. Landlords and lenders alike want a complete picture of your financial history. Landlords will most likely look at your credit report to get a sense of your payment history and credit score. Lenders will pull your credit report as well as do an in-depth review of your income, debts, assets and liabilities, to make sure you meet their standards for debt-to-income ratio. Either way, you want to “look good on paper” so when you are ready to make your move you can.

It is always good financial practice to review your credit report once per year. Unless you have experienced several financial pitfalls, you are probably in great shape. If not, then you will need to adjust your timeframe so you have adequate time to clean up your credit. You may need time to pay off credit card debt or improve your payment history. If this sounds familiar, do not wait to begin improving.

Something else to keep in mind when it comes to your credit report is that the most competitive interest rates are offered to buyers with higher credit scores. According to, each lender sets its own standards for what constitutes a “good” FICO score (O’Shea, 2016). But, in general, FICO scores fall along the following lines:

  • 720 and up: Excellent credit
  • 690-719: Good credit
  • 630-689: Fair credit
  • 300-629: Bad credit

Our recommendation is: Use the link above to order your free credit report (unless you have a recent one and have had no changes). Review each line item to ensure the report is correct. Otherwise, once you are confident you are ready to apply for a lease or a loan, onward and upward!

Then there is the question of whether now is the right time to end your lease or sell your current home? If you are in a lease or are paying on a mortgage, ideally you want to be able to walk away without taking a loss. You will need funds to cover security deposits and one-to-two months’ rent or enough money to make a down payment and cover closing costs. That is unless you own your home outright, are financially prepared to carry two mortgages or can cover expenses that result from your decision to act now or wait. Our recommendation is: Weigh your options carefully, avoid making a rash decision based on emotions and choose to make the move that is the most money-wise.

Lastly, there is the “cost” making a move can have on you personally. Ask yourself how life is going to be different – now and in the future. Changing homes and/or neighborhoods can put strain on relationships and create additional stress. For example, if you are involved with a big project at work that requires a large amount of overtime or you are about to grow your family, then it may be a good decision to wait for the dust to settle a bit. If you will be moving away from old friends, think about how you will maintain these relationships.

Moving may even elevate your social status by placing you in closer proximity to others that have also acquired enough wealth to move up. Earlier in the article, we asked you to create and evaluate a new budget. It may be a good idea to add additional expenses for social outings and see if your new budget can accommodate greater social expectations should you be open to the prospect.

Obviously, a perk of moving into a larger home is there is more room to spread out. We moved and discovered another perk. We have an easier time storing our belongings. We also have acquired enough space for an extra guest room and a larger room for our study/exercise room combo. Any stress that comes with moving into a larger space may be worth it.

Life has to be good when you find yourself considering “moving up”. Our recommendation is: Conduct a thorough self-assessment of your personal and financial situation to ensure you are prepared for what is ahead.