If you’ve outgrown your home and need more space, you have two options: remodel or move. Here are some questions to ask yourself when deciding which solution is right for you.
What are the pros and cons of a renovation?
Renovating your home to provide more space is one option that has several advantages. The biggest benefit is that you don’t have to sell your current home, buy a new home and move. If you love your home, neighborhood or schools, then you can keep them. A renovation also offers the opportunity to make other desired updates and improvements to your home besides just adding more space. While renovations can come with big price tags, they can be financed with mortgage products, and the work often increases the value of your home.
Renovations, however, have their downsides. The biggest negative is that renovations require work and disruptions. You’ll need to shop for a contractor, decide on the scope and details of the project, secure financing and put up with the mess, noise and inconvenience of the renovation work. Depending on what kind of work is being done, you may temporarily lose access to parts of your home or certain appliances or fixtures. While most renovations will give a boost to your home’s value, exactly how much benefit you’ll receive will vary based on factors ranging from your local real estate market to your own design tastes.
What are the pros and cons of buying a bigger home?
Purchasing a larger property is the most popular solution for those who need more space. While buying, selling and moving isn’t necessarily a small task, it may be more appealing than managing a home renovation project. A new home also offers the opportunity to get more than just additional space, be it a different community, a better school district or improved home features. If you’re moving from an expensive market to a cheap one, your upgrade move could be very affordable.
Although usually an exciting and happy time, buying a new home has its drawbacks as well. At a minimum, you’ll have to go through the process of selling your current home, finding and buying your new one and moving in and getting reestablished. You may also have to bid farewell to some of the things you like about your current home or community. Furthermore, upgrading to a new home can easily cost more than a renovation.
What are the costs and financing solutions for each option?
It’s important to know the approximate costs of your options. With a specific renovation project in mind, you can perform a simple Internet search for a general cost range or contact local contractors to request a more precise estimate. If you’re considering buying, you can browse real estate websites like realtor.com to get a sense of the cost for homes you’re interested in.
Unless you have access to some serious cash, you’ll likely need financing for either a renovation or a new home purchase. Thankfully, there are several mortgage options available to accomplish each. For a renovation, you may be able to access the equity in your home or obtain a renovation loan. For a purchase, there are a plethora of financing options for buying a home. Your specific financing options and out-of-pocket expenses will vary depending on your specific situation.
Having asked and answered these questions, you should have a good idea of the best solution for your needs. If your plans require a home loan, we at Draper and Kramer Mortgage Corp. can provide you with a free mortgage consultation to help you determine your options and costs. If you need a real estate agent to help you evaluate your home purchase options, we can also refer you to a local professional with a solid track record. If you’re ready for a home upgrade, just ask us how we can help!