Dear Heather: I am thinking of selling my condo and getting a free-standing home for my growing family, how will I know when I’m ready to do this? — Moving Up

Dear Moving Up: Today’s housing market presents considerable opportunities for potential home buyers with the right lifestyle and job security. Prices have, for the most part, stabilised. Interest rates are low and inventory levels are fairly high. Even amid such incentives, many move-up home buyers, remain on the fence about making the lifestyle change they desire due to concern over selling their current property.

Consumers today are benefiting from the price corrections many markets have seen over the last few years. So while owners may have seen the value of their current home decline, they are also finding that the “move-up” home has also seen a beneficial price reduction. For example, the difference in a 30 per cent price decline for a $600,000 home is $200,000, whilst on a $900,000 home that same decline in value represents as much as $300,000. And, when the market improves and price appreciation returns, the more expensive home will see a higher percentage dollar increase.

Below are five questions to ask yourself to see if you are ready to move up:

1. Have you built substantial equity in your current home? Home equity can be defined as the value of a home, minus the amount of outstanding debt.

Although equity does not generally develop in the first few years of home ownership, five or more years of home payments may create significant unrealised gains, even if your home sells at a lower price your sales proceeds should result in capital gain.

2. Has your income or financial situation improved? Homeowners should consider their overall financial situation including current and future expenses in order to make an educated decision on price range for a new home. For example, an increase in salary may allow for an increased mortgage payment.

3. Has your lifestyle changed? Lifestyle changes are one of the most common reasons people choose to move. Starting or adding to a family may require an extra bedroom or additional square footage, as well as a desire to live closer to work, or family may provide the impetus for a move to a larger home.

4. Is your current residence one that could potentially be rented out? For those homeowners who are ready to make a move but are concerned about purchasing a new home before the current property is sold, renting out the current residence may be a viable option.

5. Are interest rates attractive? A low interest rate means lower mortgage payments on homes of the same price. Ask your bank what interest rates they can offer you.

Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 25 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332 1793. All questions will be answered confidentially