The housing market is tight and mortgage interest is high. If you need more space, renovating is probably a better choice than buying new, especially if your house is smaller than those on your street.
1. You Know the Neighborhood
If your children attend a local school and you’re happy with it, staying put may make better sense. Should you want something better, it may make sense to look for a transfer option. Unless your location is unsafe or your commute is extreme, you’re probably going to be happier staying in the same house.
2. You Know the History of the House
It’s a good idea to keep a running tally of repairs and replacements of the expensive things on your home. If you just bought a new HVAC system or water heater, you usually won’t get your investment back when you sell.
No matter the style if your home, there are simple updates that you can make to increase your enjoyment in the house. If you love movies and games, it may make sense to turn a den or a living room into a game space. Wired-in speakers, new window coverings and comfortable chairs could be all that you need.
3. You Can Use Your Equity Wisely
As interest rates rise, refinancing your entire mortgage may not be a wise choice. Unlike a new home purchase, you may be able to borrow solely against the equity in your home or against a retirement account to take care of the cost of your home renovation.
Unless you are really skilled, make sure you are working with a contractor you trust. Large renovation projects, such as the addition of a new kitchen or a second story, will take a great deal of knowledge and skill. If you want to keep costs down, it may make sense to do your own painting or put down vinyl plank flooring.
4. You Can Plan for the Future
Now is the time to plan for the future. If your children are grown and you plan to age in place, you can update the bathrooms and move the laundry to the main floor. If you’re just starting your family, it may make more sense to add on bedrooms or build another bathroom.
5. You’ll Save Money in the Long Run
Moving is not easy. Unexpected expenses always creep up and you may be surprised at the interest rate options on your new mortgage. If you’ve got a low interest rate and a manageable payment at this time, it may make more sense to finance your renovation separately and put any extra cash against that second loan until it’s gone.
Your new home might just be the one that you’re living in. Take your time with the renovation and carefully consider what it is that you really need. If you feel your new house is too small for your current or future needs, get creative and reimagine your floorplan to fit what you need your house to offer. For example, you could turn a formal dining room into another bedroom or an office space, and you could turn a larger laundry room into a space that includes a walk-in pantry too.