Should I Buy A Bigger House?

If your house has started to feel a bit cramped, it might be time for an upgrade. Whether you’re living with an expanding family or just trying to make room for your hobbies, furniture or pets, space is important. Having enough space to keep your home clean and organized without clutter is a solid goal. More space, however, isn’t always a good thing. Bigger does not necessarily equal better.

Let’s talk about the advantages and disadvantages of packing up and moving into a larger home and whether or not it’s the right choice for you.

Reasons To Buy A Bigger House

First, let’s go over a few of the reasons you might consider moving into a bigger space rather than staying in your current one.

Lack Of Space And Storage In Your Current Home

Have you started storing things in boxes under your bed because there’s nowhere else to put them? Maybe you’ve noticed there isn’t enough room in the closet for all your clothes, or enough space in your living room for all your furniture (especially that coffee table that you keep stubbing your toe on).

If this sounds like you, it might be time to upgrade to a bigger space. Having enough living space is important and becomes an even bigger problem the more people you have under one roof. If you thought the living room was cramped before, it might become unbearable when you add more kids or relatives to the equation.

We all need space, for privacy and peace of mind and for hanging out and entertaining guests. When things get too cramped, separate spaces start to blend together and it might start to feel like your home is a cluttered mess. If you make the move to a bigger space, you could enjoy some much needed additional storage space, entertaining space and hopefully, some space where you can relax and unwind free of noise or clutter.

Unexpected Family Factors

When you have a new child, you typically have some time to plan for the space in your home they’ll need – but sometimes unexpected family factors can come up that may leave you with less space and no solution. If your adult children move back in with you after being away at college or on their own for a while, they could require more space than you have available in the house. The same goes for aging relatives and other family members who may find themselves under your roof.

If you don’t want to wait in line for 3 hours every morning to use the bathroom, upgrading to a larger space with room for everyone might remedy this problem.

Shrinking Equity Due To Neighborhood Trends

Your house isn’t just your home: it’s an investment, too. Like any investment, it can be positively or negatively impacted by the economy over time. You may notice that the value of homes in your neighborhood has become stagnant or could even be actively decreasing. If real estate in your neighborhood is trending downward, it might be a good idea to get out while you still can and use the money from your sale to upgrade. No one wants to see their equity shrink – and unfortunately, shrinking neighborhood value isn’t something you can really control. So, if your home value is sinking and you were thinking about moving anyway, now may be the best time to do so.

Lifestyle Changes

As the years go by, our lifestyles tend to change, and sometimes it may be helpful to have a change of scenery, too. When you moved into your house, maybe it was just you and your significant other. Years later, it might be the two of you plus kids, a dog and two cats. You may have a different job now with a farther commute – and maybe your friends and family moved away, too.

Considering your life changes, it could be a nice change for you to relocate. On top of getting some much-needed extra space for yourself and your family and/or pets, you can also find a place closer to your job, family or friends.

Reasons Not To Buy A Bigger House

Now that you’ve considered a few reasons why it might be a good idea to relocate and find a bigger place, let’s take a look at the other side of the coin. When is it not a good idea to buy a bigger house?

Increased Financial Strain

Buying a bigger house means that you’ll most likely be paying more for it than you were your previous home, though there are exceptions to this, depending on your location. Typically, though, you can expect higher mortgage payments, increased property taxes, higher closing costs and potentially even a higher interest rate.

If you’re not prepared to take on the additional costs or are still working on improving your credit score and debt to income (DTI) ratio, you may want to wait to upgrade. A bigger space isn’t worth an unnecessary financial burden that you’re not prepared to handle.

More Home Maintenance

A larger space often means more maintenance, too. If you’ve upgraded to a bigger yard, that’s more grass you’ll have to keep trimmed. A bigger kitchen and a few additional rooms are more things you’ll have to clean. More space to clean means more cleaning supplies. More cleaning supplies, as you may have guessed, cost more money.

If you ever want to paint or renovate anything in your new home, it will likely cost more as well. With more square footage of house to fix up, your renovation costs will increase. More paint, more flooring – you get the picture. If you have additional bathrooms, that’s more plumbing you may have to keep clean and operational, too.

For a more in depth look at all the parts of your home that could see an increase in maintenance costs, check out our home maintenance checklist.

Problems With Your Current Home Are Solvable

Some space issues may not warrant buying a whole new house, so consider the severity of your situation. If you just want to add an office to your home, think about where you could fit a desk in your existing layout or consider building an addition. If you need more space in the kitchen, consider renovating and putting in a new one.

Of course, renovations aren’t cheap – but neither is a new house. If you have space issues that could be solved by a renovation or some layout changes, it might be cheaper than closing on a brand-new house with higher monthly payments.

How To Buy A Bigger House

If you do want to go ahead with buying a bigger house, first get a good idea of where you’d like to live and what sort of home you’re looking for. Once you have that in mind, it’s a good idea to check in on your credit score, DTI and other finances to determine what you’ll be able to qualify for and afford.

To get an estimate of how much house you can afford, use our Home Affordability Calculator.

Once you have an idea of what you can spend, the next step is to choose a mortgage lender and get preapproved to see what size loan your lender can qualify you for. Once you’ve got that, you can find a real estate agent and start the home search process.

When checking out homes with your real estate agent or REALTOR^®, be sure to let them know all your must-haves. If four bedrooms is a must, make that clear. You want to make sure you’re not walking into another space issue.

Should I Buy A Bigger House Or Invest?

Buying a bigger house can be not only time consuming but also a huge drain on your finances. If you’re comfortable in your current home, making an expensive move might not be the right choice. Consider what other avenues you could pursue if you used the money you’d spend on a new house on something else.

Closing costs alone make up 3-6% of your new loan amount. If you’re buying a $200,000 house, your closing costs could be anywhere from $6,000 – $12,000. With that on top of a down payment of around 20% ($40,000, if you’re getting that $200,000 house) and other costs, you may wind up paying out $52,000 or more, in this example. And that’s not even factoring in your mortgage payments for the first year.

If you’re not sure you want to shell out that much cash, consider instead investing that money toward your retirement, a college fund or just your savings. You can always move later. It could be best to wait until you’re more financially stable in some situations.

Should I Buy A Bigger House Or Pay Off My Mortgage?

If you do have the money to move into a bigger house, you may be wondering if you should use it for that purpose or just pay off your existing mortgage. Depending on how much you still owe on your loan, this may or may not be a feasible option. Buying a bigger house is very tempting, but so is living without a mortgage. Having no monthly payment after paying hundreds or thousands of dollars a month for years can be extremely freeing.

Ultimately, it’s up to you. Some people would be happier moving their family into a bigger home with more space for the whole family, while others would find more peace in getting rid of their current monthly payment. Consider your financial situation and how much you still owe on your current mortgage before opting to pay it off or move.

The Bottom Line: Buying A Bigger House Can Be Worthwhile For Many Homeowners

If you need the space – or have just always dreamed of upgrading – buying a bigger house can be a worthwhile investment. It isn’t the right choice for every homeowner, however, so be sure to consider your financial situation and space needs thoroughly before making a decision.