Moving vs. Remodeling Your Home

Have you outgrown your space? Do you need an extra bedroom for a new addition to the family? Maybe an extra bathroom would be nice, since your teenage daughter is always in the one and only bathroom you currently have. Whatever the reason, you know it's time for a change. The question now is, should you move to a new home or just remodel your current one? Let's take a look at the some advantages and disadvantages of both:

Moving to a New Home

While moving is definitely an exciting time, it can also be very stressful for the entire family. Many people underestimate the costs, financial and otherwise, of moving to a new home. In addition to a larger mortgage payment, you'll also probably have higher upfront costs and utility costs, more taxes, added moving costs, etc. Time should also play into the considerations; how long will it take to sell your house and find a new one that fits your needs? Will the kids have to switch school districts? How does a move affect your commute to work? Let's take a look at some of the advantages and disadvantages of relocating:

Advantages

1. Fresh Start - Just like getting married or having a child, moving to a new house is a new beginning. It's a chance to start fresh and build the life that you want. Your surroundings are new and you have new neighbors to meet. It's out with the old and in with the new! 
2. Family Bonding - Since moving can bring about fears of the unknown, it's a chance for bonding with your family. You're working through this new experience together, which in turn brings you closer together. During the adjustment period, families often retreat to the comfort of familiar relationships and common interests. 
3. Financing Options - You've already bought a home before, so you're already familiar with the loan process and the different financing options that are available. You also have professional help available through your real estate agent and your mortgage lender at the Lake of the Ozarks. 
4. Taxes - Tax laws could have a positive impact on your choice to sell your home and buy a new one. You could even come out with money in your pocket due to the capital gains exemption. Tax credits may be available as well, depending on when you buy your home and how eco-friendly the new place is. 

Disadvantages 

1. High Transaction Costs - Selling and buying a home involves the help of many people, each of whom will get some type of commission off the transactions. In addition to real estate commissions, there are appraisal expenses, title search fees, title insurance, and legal fees. All of these can be avoided by choosing a remodel over a move.  
2. Hassles of Moving -  There's no doubt that moving is a pain. Dealing with all the stuff you've accumulated over the years can be overwhelming. Many of the items you find probably never get used, which leads to the need to go through everything as you pack it. This process makes packing and moving take even longer. 

Remodeling Your Home 

As expensive as it is to renovate, it's tempting to think that moving is the safest bet. The fact of the matter is, contractors won't give you an unbiased opinion because they want the work. First, you should get a cost estimate and then determine how much value the remodel would add to your home. Once you've determined those numbers, compare the new value with the value of other homes in your neighborhood to figure out if you can make your investment back or not. Here are a few other advantages and disadvantages to remodeling for you to consider:

Advantages 

1. Less Expensive - As a general rule, home improvements cost less than moving up, but it depends on what kind of improvements you’re doing. Remodeling occurs on a room-by-room basis. Therefore, you can change as little or as much as you need to still stay within your budget. 
2. Stability - By remodeling rather than moving, you're able keep the same neighbors, shop at the same nearby grocery stores and more. Moving is stressful; there's no doubt about that. Remodeling allows you to stay in comfortable surroundings and sometimes stability is most important. 
3. Familiarity - You know eveything there is to know about your current house. If you get a new one, you don't know how much the utilities are going to run or how recent repairs have been made. The air conditioner could go out the day after closing or the roof might be just days away from starting to leak. Did the previous owners keep up on the maintenance as well as you do? You can never know exactly what to expect in a house that was owned by someone else. 
4. Customizable - When searching for a new home, it's hard to find one with everything that you like. Remodeling allows you to keep the aspects of your current home that you like, but change the others to meet your needs. Renovations are completely cusomizable to fit your needs and allow for personalization. 

Disadvantages 

1. Financing - In order to afford a remodel, you'll probably have to take out a second mortgage on your home. While there are benefits to getting a home equity loan, there are also risks. For more information on this type of financing, check out our previous blog, "The Pros and Cons of Taking Out at Second Mortgage." These loans typically require a higher credit rating, and involve higher interest rates. Approvals are determined on the amount of equity in the home, the cost of the remodel and the expected home value once completed. 
2. Construction Time - Remodeling means that your home will be in shambles for days, possibly even weeks depending on the project. If you choose to stay in a hotel, there's an added expense, but if you choose to stay at home,  it's a bit stressful and loud. A remodel requires a lot of patience. 

Financing Your Decision 

The decision to remodel or move comes down to two thing: emotions and finances. As your Lake of the Ozarks mortgage lender, I'm here to help you with all of your financing needs. Together we can take a look at your financial situation and come up with the best solution to fit your needs. Whether you're looking for a home equity line of credit to afford some renovations or a new home loan at the Lake of the Ozarks, First State Bank Mortgage has options for you. Contact us today at 573-746-7211 to get started!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Sr. Residential Mortgage Lender

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(573) 693-9141

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.