Before you pack your bags, check these items off your list.
A lot of people are rethinking their living situations due to the coronavirus pandemic. In fact, some workers are abandoning expensive cities and relocating to places where the cost of living is cheaper. But before you gear up to move to a more affordable city, do these important things.
1. See if you can keep your current job -- and your current salary
Many people are making plans to work remotely long-term, now that they've done it successfully for almost a year. If you want to keep your current job but live in a new city, talk to your employer to make sure that's possible. And if it is possible, see if there are salary-related implications. Your employer may well decide to let you keep your current salary if you move, but your employer may also adjust your earnings downward if you move someplace cheaper to live.
For example, the cost of living in Raleigh, North Carolina, is substantially lower than it is in San Francisco. If your employer finds out you're moving from the latter to the former, you may have to take a salary cut.
2. Make sure you're a good mortgage candidate if you plan to buy a home
Moving to an affordable city could make it possible for you to become a new homeowner -- but that assumes you can qualify for a mortgage. To get a home loan, you need solid credit (a score of 620 is generally the minimum, though some lenders may impose stricter requirements), a low debt-to-income ratio, and a steady job. With regard to the last, if you switch jobs when you relocate to your new city, that may be a red flag for lenders -- they generally like to see a stable, established income source. If you do have a new job, be prepared to provide a letter from your employer when you apply for a home loan.
3. Check out the public transportation situation
Some cities have more robust public transportation networks than others do. If you're coming from a city like New York, Boston, or Chicago, you may find that a smaller city doesn't have the same reliable setup you're used to. And if that's the case, you may need to budget for a car so you can get around town. Having a car can be expensive, though: It costs $9,561 a year on average to own and maintain a vehicle, according to AAA. Not only is that an added expense, it's one that could make a city that seems more affordable less so. Do your research so you know what to expect.
Relocating to a new city could be your ticket to a more laid-back lifestyle and a better quality of life. But make sure to tick off the above boxes before packing your suitcases. That way, you can embark on your new journey with confidence you're making the right call.
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