Are you Ready to Buy a Move-Up Home in St. George?

Are you Ready to Buy a Move-Up Home in St. George

You've probably heard of a starter home and a forever home, but what do you call it when you are looking for something in between? Some real estate experts have started to call this the "move-up home." It's the property you buy when you are ready to move on from your starter home, upgrading by leveraging your equity and new financial position to buy a house that fits your new stage of life.

Are you ready to buy your move-up home? Here are 2 signs it might be time to move on from your starter home, even if you can't yet or do not yet want to buy a forever home.

1. You've outgrown your current home

Many buyers purchase their starter home because it will meet their needs in the present and the near future, but they know it won't work forever. Others may be surprised to find that they are outgrowing it because of unexpected changes to the family size or lifestyle.

Whatever the reason, you may need to move on from your starter home out of necessity. Even if you have not literally outgrown it in the sense that it is too small, there are plenty of reasons it might not meet your needs anymore.

Here are some of the valid reasons your starter home just might not work any more:

  • It was never your ideal investment in the first place, but it was what you could afford at the time.
  • You have welcomed new children, pets, or other family members into the home and need more bedrooms or yard space.
  • The location is no longer working for your commute, the school district you are in, or the neighborhood dynamic you want.
  • Your career has shifted to working from home and you need home office space.
  • Your lifestyle now includes more hospitality and you would like to have more entertaining space.

2. You have equity you want to leverage

If you bought your starter home more than a couple years ago, you likely have a substantial amount of home equity (the difference between what you owe on your mortgage and the market value of your home). Moving on from your starter home can be a great way to leverage that equity and benefit from it.

While you can certainly stay in the starter home and continue to let the equity build passively over time, there are other ways you can access this equity that may be more financially advantageous.

One way to do this is to get a cash-out refinance on the starter home, taking some of the equity out as cash to put toward your move-up home. You can use the money for the down payment and closing costs, renovation, or maybe a combination of the two. In this way, you can own two properties relatively easily, using the equity in your starter home rather than coming up with more cash.

When you leverage your equity this way, you will have held on to the original asset and can rent it out to cover the ongoing mortgage on the refinanced loan. The cash you took out can even be used to help prepare the property to be more renter-friendly, if needed.

Another option is just selling the starter home altogether, taking the equity and putting it toward your move-up home. Because you are already a homeowner, your home equity can offset the cost of buying a home at the higher interest rates we are seeing today and make owning your next home more affordable than you may have thought.

Are you looking for a move-up home in the Southern Utah area? Give me a call at any time. Check out the newest listings in our area now.

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