Maybe you have recently added another child to your family. Maybe it's time to bring your aging parents into your home for more care. Or maybe your job has gone remote, and you need room for an office. Whatever the reason for needing more space, it can be difficult to know whether to move or to add on to your current home. There are several factors to consider that can help you make your decision.
What Kind of Space Do You Need?
Knowing why you need more space is essential. Do you need more room for the kids to run and play? Do you need more bedrooms? More storage? More bathrooms? Once you firm up this purpose of the additional space, you can move on to the next question.
Can Your Current Home Be Modified?
If you need more bedrooms or an office, does your lot have enough room to add on more to the home’s footprint? Or are there walls that can be taken down or rearranged to carve out the new spaces? Is adding a second story a possibility? An architect or contract can give you some ideas about how you could get the extra room you need.
Would a Move Improve Your Location?
Even if your home CAN be modified, would it make more sense to move for location’s sake? If you have a long commute, could you cut down on expenses by moving closer to work? Or do you no longer need to commute and could save money by finding a place with everything on your wish list that is farther into the suburbs?
How Would a Move or Addition Affect Your Mortgage?
With a bigger mortgage usually comes a bigger mortgage as well as higher taxes and utility bills. To fill the larger space, you usually need to buy new furniture. And then there will be the cost of maintaining more house and yard. Plus, interest rates may be higher today than when you last bought your house. You’ll need to factor all of this in when deciding whether to move or add on.
However, in the pandemic aftermath of labor shortages, it can still be very difficult to find contractors and prices are often steep for renovations and additions. Don’t assume that adding that extra space will be less expensive than moving in today’s market. It can run anywhere from $80 to $200 a square foot. Make sure you get several estimates on any renovations and compare them to the costs of buying a place that already has the space you need. If you currently have a lot of equity in your home and you’d really like to stay in your neighborhood, a home equity loan or home equity line of credit (HELOC) can help you tap into your share of the home’s value to pay for the addition. You could also do a cash-out refinance loan to take advantage of your equity for the extra space.
Are You Willing to Move Out During the Remodel?
Depending on how extensive your addition or remodel is, you may need to vacate the property for a few weeks to a few months. Is moving to a hotel or staying with friends or family for that long worth it to you?
Is It a Good Time To Buy?
Finally, it's important to consider the current market climate. While prices are still higher than they were last year, the housing market has definitely started to cool over the past several months in the wake of higher interest rates. Speak to a trusted real estate professional about where there might be affordable options to help you get the added space you crave.
Give us a call today so that we can help you get Pre-Approved for a loan to buy a new home or to refinance your current home loan.