Should You Remodel or Move?
Sometimes our needs change and the house we thought we’d call home forever may no longer work for us. When this time comes, we have to decide whether it’s best to buy a new home or remodel our existing one.
This is often a difficult decision to make that depends on each unique situation. For those who love their home but want a fresh new look, deciding to remodel might be the best choice. For those who may want a change in scenery or need to upsize or downsize, moving may be the best solution.
Here are some things to consider when faced with the decision of choosing a home equity loan for a remodel or a mortgage to purchase a new home.
Reasons to Remodel
Selling your home and moving can be an emotional task. It’s also very stressful, so if you love your home but want a fresh look, here are some advantages of remodeling your current space.
- Personalize Your Home – Remodeling your current home allows you to update your home with a new look and feel. From paint color and finishes to new appliances and custom features – you can make your current home feel brand new.
- Stay in an Area You Love – When you remodel your current home vs. moving, it changes the things you don’t like, but it also lets you keep the things you love like your neighbors, short commute to work, your child’s school, and more.
- Increase the Value of Your Home – Home renovations mean an increase in home value. Making savvy choices during your home remodel can improve your living space and also add value when you make smart choices with well-thought-out upgrades.
Reasons to Move
Home renovations can be time consuming and costly if things don't go as planned. Also, there are some things a renovation can't fix, such as the location. If you’re considering a change in scenery and want to move, here are some advantages of that decision.
- No Construction Nightmares – Not having to deal with potential hiccups or obstacles that may arise with a major home remodel is (almost) priceless. When tackling a home renovation, there is potential risk of an unexpected challenge that may cause project delays or added costs.
- New Beginning – There are some characteristics that renovations can't fix, like a gaining a bigger yard, new neighborhood, or better school district. Moving offers you and your family a fresh start in a new city, state, or community as well as an opportunity to meet new people.
- Get What You Want and Need – Moving allows you to find a space that fits you and your family's needs. If you've outgrown your current living space or have extra empty rooms that you're not using, it may be less stressful to find a new home with the space you want and need.
When a New Mortgage is a Better Option
If you’re not someone who wants to live through construction while managing a large renovation or have decided it's time for a change of scenery, then getting a mortgage to purchase a new home may be a better option for you. Here are some advantages of getting a mortgage to purchase your dream home.
- Low Interest Rates – Mortgage interest rates are typically lower than that of a home equity loan. Rates can be fixed or adjustable depending on the type of mortgage that best suits your homebuying needs.
- Choosing the Right Mortgage – Your budget, home requirement needs, and other factors will help you determine which type of mortgage is best for you. There are a variety of mortgage programs designed for any type of homebuyer, whether you're a first-time or seasoned borrower. Be sure to get preapproved before you start house hunting!
- You Don't Need a Big Down Payment – While some mortgages require hefty down payments, there are programs with low down payment options. Be sure to check out our Mortgage Calculator tool to see how much house you can afford.
When a Home Equity Loan is a Better Option
If you've decided to stay in your current home but want to give it a facelift, then getting a home equity loan may be a better option for you. A home equity loan allows you to use the money already invested in your home, referred to as equity, as collateral for things like home upgrades, that you could not have afforded otherwise. In some cases, a home equity loan may also be called a second mortgage.
- You Must Have Enough Equity to Qualify – First and foremost, you must have enough equity built in your home in order to qualify. Most lenders won't issue a home equity loan unless your combined loan-to-value ratio is around 80% or less.
- Fixed Interest Rates – Home equity loans are a fixed rate meaning a consistent lower payment and no surprises. Home equity loans have much lower interest rates than a credit card making it a good alternative for funding home projects.
- Possible Tax Deductions – A home equity loan may offer you a tax deduction from your income and potentially lower the amount of taxes you owe. Be sure to consult with your tax advisor first.
Financing Your Move or Remodel with Peach State FCU
When it comes to financing your move or home remodel, turn to a trusted lender like Peach State FCU. A new mortgage can help you pay for the home of your dreams, while a home equity loan can help with home remodeling costs. We offer home equity loans as well as mortgages that can get you into your dream home as soon as possible. Get pre-approved today or if you have questions please don’t hesitate to contact us today!