Selling your home and moving is a big decision. These five questions will help you decide whether you’re ready for a new home.
How much equity is in your current home?
Check your mortgage statement to find out how much you’ve paid down. In the first few years of your mortgage, most of your payments go towards interest but, if you’ve owned your home for more than five years, you may have significant, unrealized gains.
Is your current neighborhood still serving you?
Maybe your decision to live in your current neighborhood was based on schools or proximity to a job that you are no longer commuting to or you’d like to live in a more urban area or closer to family members.
Does it make more sense to remodel your current home?
If you need more space, adding on could be an option but, if you’re looking to downsize, remodeling won’t solve your problem.
Are you comfortable moving in the current housing market?
Right now, inventory is very low in most of Massachusetts meaning that your home will likely sell quickly and for top dollar, but it may be difficult to find a new home that suits your needs and wants. You might have to consider renting for a short time.
Do you understand the capital gains tax rules?
Under current tax laws, most house sellers enjoy a significant tax break, up to $250,000 in capital gains ($500,000 for a married couple) on the home sale if you meet the following criteria: (1) the home has been your principal residence for at least two out of the last five years; and (2) you have not sold or exchanged another home during the two years preceding the sale.