Remodel your home instead of buying another one

High housing prices may make remodeling more cost effective

The prices of houses have risen dramatically in the United States in the past half decade. In fact, the median home is now priced at $225,000, a price that few people can afford. The prices have recently cut back a bit, due in part to the continued rise of interest rates, which make buying homes even more expensive. High prices or not, some homeowners are going to find that they need larger houses. What can you do if you need more space but cannot afford to buy another house?

Your solution might be right under your roof. Your most cost effective solution to this problem may be to remodel your existing home. It doesn’t work in all cases, but for many homeowners, adding a room or two to the existing house may be the best, and most cost effective, solution to the problem.

There are several reasons why remodeling may be the best route to take. It is easier to get financing for a lesser amount of money than it is for the price of a complete home.

If you have owned your house for a number of years, it is probably worth a lot more than you paid for it. That means that you will have substantial equity in the home. Lenders will gladly allow you to borrow against that equity in the form of a home equity loan or a home equity line of credit. The costs of taking out such loans are minimal and the paperwork is a lot simpler than for a primary mortgage. And like a primary mortgage, the interest that you pay on it is deductible from your Federal income tax.

With sales of new homes slowing down, a lot of contractors are looking for work. In fact, depending on where you live, you might even have competition from contractors to do your work, which could save you money. Some remodeling projects, such as a kitchen makeover or a master bathroom overhaul, can even return nearly all of their costs when you sell the home. Other projects, such as adding a room or two to the house, increase the home’s square footage, thus increasing its overall value.

Another reason you might want to remodel rather than move is simply one of comfort. If you have been living in your home for a number of years, you probably like it, and you are probably comfortable with your neighbors. By remodeling instead of selling and moving, you get to keep the continuity that comes with staying put.

Remodeling won’t work in all situations; some houses are simply not suited to adding rooms, for instance. You may have a house on a small lot and you just might not have enough room to add on. For questions on these matters, you should probably discuss your needs with an experienced contractor, who can tell you whether or not what you would like to do is feasible.

With interest rates rising and home prices continuing to sit near record levels, remodeling or adding on to your existing house may be your smartest and most cost effective plan of action.