Are You Financially Ready to Move Across Country?
You have been dreaming of this day for years. Maybe you long for a change of climate, a reunion with family members you hope to see more often, or a lifestyle overhaul. Whatever your reasons for wanting to tackle the big adventure of moving across country, it can be challenging to know when to make that dream a reality. Here are five things to consider that could help you know if you are financially ready to pack your belongings and start your moving adventure.
- Am I Financially Ready?
Depending on your next location, you could be moving to a city with a higher cost of living or a lower cost of living. Many people think of moving as keeping the same budget, just in a different location. They plan only for the cost of moving their belongings from one place to another. However, your money may not stretch as far in some places, such as New York City, Los Angeles, or Portland, Oregon. A higher paying job promotion, for example, may feel more like a lateral move or even a financial demotion when relocating from Charlotte, North Carolina to Portland, Oregon as your living expenses will increase greatly. Taking the time to research the housing market in specific neighborhoods, fuel prices, and state tax laws will give you a starting point to understanding the income you will need to be comfortable in your new location. Try using a cost of living calculator for more assistance.
If you have already researched the cost of living shift in the new area where you want to live, then it is time to switch the focus to your income including any debt owed in addition to your savings plan for the move. You might be planning to get a job after you move or you may be taking a promotion. Perhaps you have a work-from-home job you can do anywhere in the world. Whatever your plan for how to earn the money to move, it is always a good idea to have enough savings to cover the first few months in your new home without relying on potentially delayed money such as a safety deposit from your current apartment or your tax refund. Costs can accrue quickly and unexpectedly with any major transition, and having a safety net in the bank to use is helpful for such times.
- How Much Can I Borrow?
With a plan for how to earn income to cover the cost of living change and a few months of savings in the bank, you are ready to check your credit score and meet with a loan officer to see how much you can borrow for your next home. Unless you are planning to rent in your new location, this step is an important part of the decision process because there are times with the banks are more strict on lending than others. Also, your current home could decrease in value when you were expecting an increase that, when sold, could be applied to your next home. As interest rates, the housing market, and attitudes about the nation's financial future wax and wane constantly, a quick appointment with your local loan officer followed by checking a few mortgage interest rate offers on sites like NerdWallet could result in a huge savings or at least more knowledge about whether or not you are ready to take on the new mortgage expenses.
- Is The Housing Market Ready?
By now, you are all set to move with a savings and income plan in place. Plus, your loan officer has told you what homes in your area are currently worth as well as how much you still owe your lender. It is time to bring in the realty experts in both locations to assess the list price of your home and the cost of the new home. This is the final step to your financial readiness plan, and it should give you a good picture of what your new lifestyle may be like when living across country.
Are the houses selling quickly in your current area? Is it more affordable to rent in your new desired location or buy a home? If it is a seller's market or you are unsure of the neighborhood you want to live in, should you rent first and then buy? These are all questions to ask your realtors before you move as the housing market in each location can be very different. You may not have the luxury of a large selection of homes available in your new location or your may have an abundance of housing choices yet the high prices are not worth the investment. Using knowledgable realtors plus a little detective work on your part on Realtor or Zillow should give you more peace-of-mind about your current home's value and how you will approach finding a home in the next location. There are also companies such as Opendoor that buy your home at a fair market price without having to go through the typical lengthy and combersome sales process. This is especially useful when the houses are not selling quickly in your area.
While moving across country requires a lot of financial planning, it can be an exciting opportunity to explore your dreams, make loads of new friends and engage in a distinctive culture. In taking these steps, you can rest easy knowing you have done all you can to make your move a financially positive experience. If the time has arrived for you to make the move across country, contact us today to see how our services can make your packing and moving even easier!