Don't move, improve — with a home renovation!
Are you a homeowner working from home a bit more than you were when you bought your home? Maybe the family has grown since then, and the spare room you used as a home office is now a toddler's domain. Whatever the reason, if you really, truly need more space, you have two options: either build an addition to your existing house — or move.
Moving to a new home can be stressful and costly. And with recent skyrocketing home valuations nationwide, buying a new one is way more expensive than in the past. Wouldn't it be better to put the increased value of your home to work for you, take on a renovation project to build in some added space and stay in the community you love?
Top reasons why it might be better to improve than to move.
- Saying goodbye is hard
If moving out of town is a possibility, consider the kiddos! If you didn't go through that as a kid, rest assured that moving into a new school district is traumatic for school-age children. You have to leave behind the old gang, meet new teachers and make new friends at school and in your new neighborhood.
Are the adults still required to head into the office a few days a week? If so — and you're considering moving further from where you work — you will have to factor in longer commute times. Moving away may also mean adult family members have to join new health clubs and kids need to try out for new sports teams, dance classes and other recreational programs.
Additionally, consider your career. If you ever need to switch jobs, are there ample opportunities for new work in the place you're considering moving to?
- Administrative hassles
There's a lot of paperwork that goes with a move. Think about getting a new driver's license, new dog license, new passports, new medical insurance cards and various other forms of identification.
You probably won't need to change your bank because most everyone banks online, but you must make sure you change your contact information with all your financial sites and utilities. Anything you do online must be reconfigured for your new address, including your water and property tax bills, home and auto insurance provider, library cards and employee contact info.
Plus, you'll need to provide your new contact info to doctors, dentists and vision care providers. Or you might have to arrange for family medical records to be transferred to new doctors if you're moving far enough away to make going to your current doctor a challenge.
- Moving isn't fun
By now, it's probably safe to say that you've already moved once or twice, and you know what a hassle it is. You either spend a lot of money on boxes and packing materials or pay someone to do it for you. And since you won't want to pack things you'll never use, you'll have to clean the clutter, hold a year sale or donate it. That's an even bigger hassle, especially if you're short on time. Then, once in the new house, you'll toss out all those boxes you bought and realize you need to go shopping because your old furniture doesn't look right in the new place — another cost.
According to Consumer Affairs, the average cost for a local move is $80 to $100 per hour for a team of two to load and unload the truck — meaning the more stuff you have, the more you'll pay to move. A family of four can expect a 10-hour move from start to finish. For obvious reasons, long-distance moves are more expensive: it costs around $5,000 for a move that crosses state lines or is over 1,000 miles. Budget twice that amount if you're going cross country.
- Closing is costly
When you sell a home, unavoidable costs eat into the profit you're hoping to get from your current home. There are realtor fees, the cost of home staging, the price of a home inspection, lawyer's fees, and land transfer taxes in almost every state.
Then when you move into a new, larger house (which you are probably paying top-dollar for), you'll also face closing costs on that home and have to set up all-new utility accounts. Let's assume there's not a costly renovation involved; you still might want it painted inside and out as well as new floors, appliances, insurance, and — if you're moving to a condo or gated community — HOA fees. There's a lot of extra $$$ to consider.
The best reason to stay put? Paying for a renovation may be easier than you think.
If you decide to stay where you are, you'll find that a renovation can turn your current home into your dream home. Not only could you create a new office for yourself or a study room for the kids, but you could also add closets, transform the kitchen or add an outdoor deck. You can update the siding, replace the roof, create dormers in upstairs bedrooms and trick out the landscaping. When orchestrating the renovation, you're only limited by your budget and imagination.
You have options. There are renovation loans and refinancing loans that can include renovation costs or provide additional cash to cover the home improvements. Or you can take out an equity line of credit.
For the homeowner dreaming of updating
Good news for current homeowners! The same loans most of our buyers use to include renovation costs in their purchase also work for refinancing. See your refinance options.
For the homeowner who has built up equity
An alternative to refinancing is taking out a home equity loan or a home equity line of credit. Home equity loan programs are based on your home's current value and, like a mortgage, come with an interest rate and deadline for repayment.
The bottom line: You've got options. Talk to a mortgage professional to learn more about what's available to you.
