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Parents: Should you buy a bigger home for remote learning?

Erik J. Martin
The Mortgage Reports contributor

Feeling like you need to upsize? You’re not alone

The pandemic has lots of homeowners and renters re-evaluating what kind of living space they need.

That’s especially true for parents working from home, and families with kids who are just starting remote learning.

A bigger house with office space, learning space, and plenty of sound-proof walls probably sounds ideal.

Of course, moving during COVID won’t make sense for everyone.

But the good news is, low mortgage rates make upsizing affordable for many.

Here’s what to know before you make your decision.

Verify your home buying eligibility (Dec 4th, 2020)

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How COVID changed the ‘dream home’

Tyler Forte, CEO of Felix Homes, says he’s seen plenty of homeowners looking to upsize lately.

“Based on our research working with home buyers and sellers daily, we’ve found that approximately 17% of all buyers are moving right now because they’re looking for a larger home more conducive to learning or working from home,” he says.

Forte notes that these buyers are prioritizing properties that have an office, loft, or other space where kids can comfortably participate in online learning.

“We’ve also seen many homeowners choosing to remain in place but who are converting spare bedrooms into offices,” adds Forte.

“Some are going as far as renovating their homes to build a space they can use for work or school.”

>> Related: The 6 best home improvement loans

Aside from extra learning space, many families are realizing they simply need more breathing room in their houses.

“Very few parents bought their home anticipating the demands of the COVID-19 lifestyle. The house that might have been vacant eight to 12 hours a day is now in use 24/7,” says Realtor and real estate attorney Bruce Ailion.

“For many families, not only are kids at home trying to learn, but one or both parents may be sharing the space, too,” he continues. This can put strain on parents and kids alike.

Verify your new rate (Dec 4th, 2020)

Benefits of moving right now

Moving during the pandemic might seem extra stressful. And there are sure to be sticky parts of the process (as with any move).

But there are unique benefits to moving right now, too.

Afford a bigger house with cheaper property taxes

Kimball Lewis, CEO of EmpoweringParents.com, recently purchased a larger home.

“Having a private home office away from the hustle and bustle of the household was critical. And since we homeschool our children, having a central workplace for the kids that was not their bedroom was important as well,” he says.

“We bought a larger house than we otherwise would have for just these reasons. And we could easily afford the larger house because we relocated to a town nearby with substantially lower property taxes.”

“We could easily afford the larger house because we relocated to a town nearby with substantially lower property taxes” –Kimball Lewis, CEO, EmpoweringParents.com

Lewis points out that parents who plan to homeschool their kids themselves, and who work from home anyway, can save tens of thousands of dollars by living a bit further outside the city and in an area with lower property taxes.

“Property taxes basically pay for the school system. So if you are not sending your kids to public school because you decided to homeschool them yourself, there’s no need to pay a premium,” says Lewis.

Flexible work arrangements make moving possible

This strategy makes sense for many now who wouldn’t have considered it a few months ago, thanks to new workplace flexibility.

Ethan Taub, CEO of Loany, says the ideal candidates for moving to accommodate remote schooling are parents with flexible work arrangements.

“The best people for this strategy would be those who either regularly work from home or run their own company that allows them the latitude to work at times that best suit them,” explains Taub.

“What I’m not hearing from buyers today,” adds Ailion, “is that they want to move to be closer to work.”

Low mortgage rates increase home buying power

Several experts believe anyone could be a good prospect for this strategy.

“At today’s rock-bottom interest rates, everyone is a candidate to improve their housing situation,” says Ailion.

“That might mean moving to a better school district with more desirable remote learning systems in place or getting a larger home or yard.”

Forte says he’s primarily seeing this trend among parents who currently live in a more urban setting but desire to move to the suburbs or a rural part of the city.

Find out how much home you can afford (Dec 4th, 2020)

What to consider before moving

There’s always a lot to consider before deciding to move — especially if you have to put your current home on the market.

“Buying another home with increased square footage doesn’t necessarily mean you’ll get what you need,” cautions Daniel Beer, CEO/founder of Beer Home Team of eXp Realty, Inc.

“Parents need to focus on functionality and the layout of their next home. Think about the number of children you have, the number of bedrooms and home offices you need, and the type of space you want for your children as they learn at home.”

Parents also need to evaluate what they’ll do with the extra space once coronavirus isn’t a worry anymore. Will the bigger house make sense long-term?

Parents also need to evaluate what they’ll do with the extra space once coronavirus isn’t a worry and their kids return to a brick-and-mortar school.

Ask yourself, will the bigger house make sense long-term? Is it a smart investment?

“This doesn’t have to be a concern if you plan to use the extra space for something else later — like a bonus room or rec room,” suggests Forte.

Another factor is job stability and the state of the economy.

“We continue to see millions lose their jobs and have to search for other employment. So what might work now may not work a few short months down the line,” Taub says.

Weigh the prospect of a new, bigger mortgage against your expected job stability. If there’s any likelihood you could be laid off or your hours reduced in the near future, a new mortgage might not make sense.

Tips for buying a house during a pandemic

Additionally, devise careful strategies for the following:

  • Putting your house on the market while shopping for another — “Don’t expect quick movement. The pandemic has created an atmosphere of nervousness among people looking to purchase a house, so the time it takes to sell your existing home could be slower than you think,” says Taub
  • Finding the best kind of mortgage loan — “Working with a good mortgage broker will be the ideal situation here,” Taub adds. You may want to consider an FHA home loan, which has a low down payment requirement. Or, if you plan to move to a rural/suburban area, look closer at a no-money-down USDA loan, which requires you to sell your current home to be eligible
  • Making sure you have access to the right amenities — Including proximity to community services, medical care, and utilities. “Strong Wi-Fi is key. If you’ll be learning or working from home, you’ll need robust Internet and a good Wi-Fi spot. Find out if this is available where you plan to move,” recommends Taub

For more information about buying, selling, and moving during the COVID pandemic, see this guide to COVID and your mortgage.

Finding an affordable mortgage

There’s one huge benefit to buying a house in the middle of this pandemic.

Mortgage rates are still near all-time lows. That means homebuyers can afford bigger houses — on smaller monthly budgets — than ever before.

The amount you’ll qualify for depends on your down payment, credit, and your new mortgage rate.

So if your goal is to upsize, shop around with a few lenders to see who can offer you the lowest rate and biggest home buying budget.

Verify your new rate (Dec 4th, 2020)