You’ve lived in your current home long enough to desire an updated kitchen or bathroom, a home office, or an outdoor entertainment area. It can be tough to decide whether to renovate or instead buy a new home that has the features you desire. Here’s how to determine which option is the better one for you.
Determining what you want
First, figure out what you want to change about your current situation. Perhaps working from home during the Covid-19 pandemic has you hooked on the convenience of working remotely and you want a permanent home office. Maybe you want a kitchen that’s open to the surrounding dining and living space. Do you want to prepare for backyard entertaining with a deck, outdoor kitchen or maybe even a pool? Determine what you want out of your living space and how that differs from your current home.
Next, study your floor plan to see whether you can get those features where you live now. Is there a den or spare bedroom you can convert to an office? Can you knock out a wall between your kitchen and family room? Is there room in the backyard to add desirable entertainment features? What would you be willing to give up to accomplish the changes you want?
If you have sufficient space but it needs reconfiguring, get referrals on remodeling contractors. Request three bids on the work to be done and compare them. Determine how much it will cost, how long will it take, and how disruptive it will be. The equity in your current home could be tapped for financing the construction through a home equity line of credit (HELOC). Talk to mortgage lenders about interest rates and loan terms so that you know how you will pay for the project. Keep in mind that if you have an interest rate of four percent or less on your current mortgage as well as substantial equity, renovation may be preferable, as interest rates on new home loans are expected to begin rising soon.
Comparing renovating versus a new home
Armed with this information, compare the advantages and disadvantages of both renovation and relocating.
Renovation means you can stay in a neighborhood you love. You’ll avoid the hard work of finding a new home and moving, as well as the cost and effort of selling your home. On the other hand, your redesign idea may not fit with the structure and space of your current home. Or you may balk at the idea of living in a house under construction for weeks.
You may be able to find exactly what you are looking for in a different house, especially a custom-built new construction home. New home builders will know the popular trends in home design, such as home office space or open kitchens, and include them in their construction. If you buy a custom home, you can have your builder design around your desires. Or you may find a preowned home that already has the features you desire. Yes, moving is hard work, but you won’t have to put up with construction dust in the house for months.
Go home shopping
If you think a new house is the best way to go, shop homes for sale, both preowned and new construction. See what is available that has what you want. Are the homes you like in your price range, and do you have the equity plus cash on hand that you need to buy one? Can you find a neighborhood with the amenities and local schools, shopping and entertainment you want? Shop mortgage lenders and compare a new mortgage to the HELOC you’d use to stay and renovate.
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