Is the grass truly greener on the other side? If you’re unhappy with your home, you might have wondered about either moving to a newer one or turning it into the house you want with a handful of home renovation projects. When making your decision, you want to consider factors such as location, budget, long-term goals and mortgage changes.
Digging a little deeper into these, we can come to several reasons for why you should renovate or why you may want to move.
Why you should renovate with a home renovation loan
You’d miss your home: Not everything can be measured with numbers, and one primary reason you may want to stay in your home is simply that you’re attached to it. Living and growing with your home has meant creating fond memories, and many of them may be kept alive by staying there. In this case, it may make sense to change up a few rooms than sell.
You don’t have the budget for it: Purchasing a house comes with many upfront costs that you don’t have to consider with a simple renovation. A down payment, for example, could be a significant barrier to getting into a new place. While many loan programs offer solutions for those buyers, a renovation loan avoids that cost (and several others) altogether by allowing you to roll the expenses into your existing mortgage.
You can increase your home’s equity: Your home is your investment. With every mortgage payment, you add on to your equity which you can use in various ways to increase your wealth. A home renovation may allow you to do this as well by directly adding value to your home.
You can avoid moving costs: The cost of moving even a short distance can climb quickly if you’re hiring full-service movers. Just getting a moving van can cost several thousand dollars. If you’re only expecting a modest net profit on your house, the additional cost to relocate may not be worth it.
You can personalize your home: Custom building a house may not be in your budget, but renovating your existing home to meet your needs and daily habits better might be. For example, you may want an open floor plan between the kitchen and family room to make it easier for the family to hang out. With renovation lending, you can turn your house into your dream home.
Why you should buy a new home
You can’t make the changes you need: If your home needs a complete do-over, a remodel isn’t for you. It’s not worth the investment to spend thousands of dollars to change every single room in your home when you could buy a new house with all of the updates. It’s also not worth it to remodel your house if you’re trying to rightsize to a smaller place.
You want to live in a new neighborhood: You get to start over in a new place — whether it’s down the street or in a new community, city or state — beginning again with your family and belongings. You get to meet new people, decorate your new home and settle into a new landscape.
You want something different from your property: If you want to build a garden, you may discover that your property isn’t large enough, or the land has poor quality soil. If you’re expanding your family, you may realize that your home isn’t big enough. Many of the characteristics of your property just can’t be changed. If that’s the case, you may want to consider leaving it behind.
You have the budget to make it happen: Selling a home is a great way to cash in on the equity you’ve built. If you have enough liquid cash to handle the upfront costs, you may come out ahead in the long run.
Your return on investment for remodeling isn’t enough: Remodeling gives you the chance to add value to your home that you can later access through a refinance or by selling it. However, depending on what you remodel, you may not see that money come back. If the ROI on an improvement doesn’t look promising, you may just want to move.
Curious about what kind of mortgage renovation loan might be available for you to use? Head here to learn more!