Has your expanding family outgrown your current home's square footage? Has scaling the stairs become more difficult? Have you grown tired of your aging and outdated kitchen?
As life’s circumstances and your lifestyle preferences evolve, so do your housing needs. When your current home no longer works for you, should you move or renovate the home you live in?
Before you make the decision to sell your home or take a sledgehammer to some drywall, consider the following 6 questions.
#1: Do you like where you live?
Location is one feature that’s fixed, meaning you can’t switch up your current home’s coordinates the way you swap out kitchen cabinets. Proximity to school, work, friends and family may help influence whether you choose to move or stay put.
#2: How hard will it be to find a home you want?
Are there homes available in your desired area and in your target price range? Do homes linger for months on the market or get snatched up quickly and with multiple offers? Do some research on the current housing market conditions to get an idea of current home inventory and the likelihood of being able to find the right home.
#3: How much equity do you have in your home?
If you have at least 15% equity in your home, you may be able to borrow against that equity to fund home improvements. A home equity line of credit, or HELOC, for example, lets you withdraw money as you need it, pay down the principle, and withdraw again. Alternatively, home equity can be converted into a down payment on a new home when you sell your existing home.
#4: What are the financing options?
If you plan to finance part or all the cost of a remodel or new home purchase, interest rates on various borrowing options will impact overall costs. Interest rates on HELOCs, for example, are usually higher than typical mortgage rates. However, with a HELOC, you may be financing a much smaller amount than you would with a mortgage loan.
#5: Is moving or renovating a better value?
To get a better idea if moving or renovating is a better value estimate your current home’s value plus the price of renovations. What is the expected value of your home after a remodel? Compare that to the cost of buying a new home. Don’t forget to factor in interest payments, financing fees, and possible moving costs.
#6: Will renovating or relocating get you closer to the home of your dreams?
With a home remodel, you can customize design choices to your decorating tastes and specifications. However, there could be limitations based on your home’s structure and the size of your property. Moving to a different house could save you the inconvenience and disruption of months-long renovations but may also come with hidden or upfront projects and costs.
Ultimately, the decision to love the home you’re in and renovate or move to a new home will depend on your financial situation, your long-term needs, and the costs of each option based on your specific circumstances.
Let our team of professionals at Zions Bank help with your home renovation or home buying plans. They can provide a cost breakdown of different financing options to meet your needs. Visit one of our Zions Bank branch locations today to learn more.
