Move or Renovate? Tips to Consider When You've Outgrown Your Space
So either your stuff is growing or your house is getting smaller. Is it time to consider a new home, or can you renovate the one you have to give yourself the space you desire? These questions and others can be answered when you decide what your needs are.
The first step for those looking for more house is to define your needs. What kind of additional space do you want, and can your current home be adjusted to give you what you are looking for?
Second, communicate those needs to a renovation or home improvement specialist. That person can tell you whether or not your expectations are realistic. Is your property large enough to accommodate an addition? Can your home's infrastructure support more room? It's hard to know that on your own, so make sure you have professional help with the planning, even if you would like to do some of the renovation work on your own.
Assuming the renovation expert gives you the green light, consider the finances involved in renovating. Will it end up costing you more to renovate your existing space than to move to a new home?
If you decide to move rather than renovate, you'll also need to consider real estate commissions and closing costs, which can be as much as 10% of the sale price of your new home. This is a key number to consider when deciding to buy a new home.
Whether you decide to take out a home equity loan to do the renovation, or find a new home and apply for a new mortgage, you'll have to factor in closing costs that include things like fees for credit reports, title insurance and appraisals. Remember, closing costs can be anywhere from two to six percent of your total loan amount so keep that in mind when you create your budget.
Make sure to weigh out your pros and cons for moving and renovating before you move forward on either option.
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