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Renovating Vs Moving: Which Is Right For You?

There are a million and one reasons someone could argue that they should move instead of renovate and vice versa. But there is no cure-all answer for deciding between moving or renovating and it is simply because there are so many aspects of one’s individual situation to take into consideration. For some, money may be the deciding factor whereas for another sentimental value may trump all other reasoning. However, it is important to weigh all major options before making any rash decisions. With the new year shortly upon us, it’s a better time than ever to figure out your plans for 2021.

Renovating
Renovating may likely be your first thought if you are not looking for such a drastic change for the new year. Especially if your home holds a lot of sentimental value, you may make every attempt you can to save it. Whether renovating or remodeling is the more fiscally responsible option will all depend on the size of the improvements you want done. Before getting started, meet with a trustworthy licensed contractor in your area to figure out what can actually be done with the budget you have in mind. If the project seems to be a little bit out of your budget, don’t panic, you may still have other options to consider before pivoting away from your renovation plans. Taking out a loan to cover the expenses of a home improvement project has become somewhat commonplace these days. Many people go through their bank or credit union to receive a home improvement loan which is perfect for any smaller scale projects like renovating your back deck or updating your bathroom. If it goes beyond that looking into a cash out refinance may be the smarter option. This method requires you to have equity built up in your home, so the amount of money you owe on your home must be less than what your house is worth. Then, a portion of the equity would go toward the refinancing and you will receive the cash out payment, tax-free. Of course, you will pay the mortgage back, but it would be at a lower interest rate than most personal loans offer. If you begin crunching numbers and find that your renovation project expands more than just a few rooms and even with a loan is just not worth it in the long run, then you may want to consider a move for 2021.
Moving
When deciding if a big move is your best option there are a few elements at play that you should consider. Just like with a renovation, if you are considering selling your home, meeting with a professional realtor to assess the cost of selling is important. But before even doing that, looking at selling and buying trends will save you a lot of time and money. Most studies show that when contemplating selling your home the best time of year is usually around Late spring to early summer. Whereas the best time to buy a home is early fall, with August being the best time to purchase. Looking at trends for next year as a whole, studies are indicating that it is going to be a big year for sellers with sales of existing homes growing as much as 7%. The only drawback is that studies are predicting record high prices for buyers. The costs of moving will differ exponentially based on how much you still owe on your mortgage. If your mortgage is paid off or close to it, there is money to be made, but for most that’s not usually the case. With a move you may think that you’re saving money by not splurging on labor and material costs you would need for a renovation, but a big move comes with its own upfront costs as well.
  1. Hiring moving professionals can cost anywhere from $300 to $8000 plus depending on if it’s a local or long-distance move. It’s important to be mindful of what your service covers as it may or may not offer options like storage, packing/supply cost or insurance.
  2. Real Estate Costs may include charges like a realtor, appraisal fees, home inspection, down payment and even cleaning costs.
  3. Moving into a new home means getting new furniture and appliances. Even if you move your old furniture, you never know what item you may realize you’re missing.
  4. Protecting your home is key. Things like homeowner’s insurance may be included in the price of your mortgage, but it won’t cover everything. Looking into a home warranty for your major appliances or seeing if you can transfer the current owner’s warranty, can save significant time and money down the road.
Utilities are probably a cost you have factored in, but depending on the area of your home the rates for things like cable or electric could be considerably higher.
This year has been tough to say the least, and many of us want to see major change and growth in the coming months. If you do plan to make any changes in the new year, you will be happy you took your time and did the research. As the saying goes, good things come to those who wait. Assessing your particular situation and striking at the right time will set you up for much success in 2021 and beyond.

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