May 11, 2020Remodeling vs. Selling Your Home: 5 Factors to Help You Decide
Big decisions like whether to remodel or sell your home can become clouded with unrealistic expectations. If you’re a homeowner and are considering whether to remodel your existing home or buy a new home, here are some factors that you and your realtor should discuss:
- Remodel Cost: To perform the type and size of renovations seen on some cable shows, most people will use a Home Equity Loan. This means that there will be interest rates, closing costs, and other expenses associated with the remodel. It’s also important to get multiple estimates from reputable, licensed companies or contractors in your area for the best strategy.
- New Home Cost: There are several expenses the homeowners will incur if they a.) sell their existing home and b.) purchase a new home. These include closing costs, a down payment (on the new home), mortgage-related expenses, and more. Find out from your realtor how much homes are selling for in your area and how easy it would be to find a new home within your budget.
- Current Home Value: Ask the realtor to estimate the current sale price of your home as-is. Then, ask them how the renovations you’re considering could affect the estimate. It’s important to note that some improvements may add very little to the overall value of your home while. While others can add significant value.
- Time: How long it will take to sell your current home? Your realtor can tell you the average days on the market for your area. On the other hand, make sure that you ask all potential remodel contractors to include the expected time of completion in their estimates.
- Long-Term Financial Effects: If you decide to stay in your remodeled home, how much will the monthly payment be on your Home Equity Loan? How does that factor into your budget long-term? Also, use a mortgage calculator to get an idea of how much your mortgage payments would be if you decide to sell and buy a new home.
We’re Here to Help!
Whether you’re looking to remodel your home or purchase a new one, we have the home loan options you need. If you’re considering a remodel, a home equity loan or Personal Line of Credit (PLOC) might be the perfect solution. For new home purchases, our Home Loan Experts will help you find which mortgage option will work best for your decision.
Each individual’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; It does not constitute legal advice. If such advice or a legal opinion is required, please consult with competent local counsel.