Home renovation becomes essential when youve stayed in your first home for a number of years. Apart from the normal maintenance needs, you might have moved up in your career and even the size of your family might have increased. Its natural for most of us to start off in life with a small home due to financial restrictions but gradually your finances improve and there comes a time when you start feeling that you need to renovate your home in keeping with your improved social status.
This is also the time when you might be pondering whether to buy a bigger home. Its not an easy decision to take and you would do well to consider various aspects before deciding on what to do.
Will The Investment Yield Any Returns?
Before deciding in favor of home renovation, you should consider whether the investment that youll make in home renovation will bring suitable financial returns. You should try to find out the status of your home in relation to the other homes in your neighborhood.
Your investment will not add much market value to your home if it is already of the same size as others but if it is smaller than others, any addition to your home will immediately increase the market value and your investment will bring good returns. This factor should be taken into consideration when you choose between buying a new home or renovation of your present home.
Budgetary Considerations
When you are in the mood for upgrading your home either by going in for a new one or for home renovation of your existing one, you do have a budget in your mind that you can conveniently set aside for this purpose. This would be needed to bridge the gap between the sale proceeds of your home and the cost of the new home if you decide on shifting to a new home. In case you choose home renovation, this amount of money will be used for upgrading your home in several ways.
Architectural Considerations
You can consult an architect for the home renovation estimates and then decide the extent of work that would be feasible with the financial resources at hand. Moreover, if you are inclined towards home renovation rather than buying a new home, you should be prepared for losing the outdoor space if you are adding additional floor space and you would have to bolster the footings if you are planning to add an extra floor to your home.
These architectural considerations should be discussed with an architect before you take any action.
Inconvenience Factor
If you plan to go in for home renovation, you should be prepared for a lot of inconvenience when the actual work of renovation takes place in your home. All the furniture and other belongings might have to be stacked in a room or a corner to make way for the workmen who will be swarming all over the place. You should have the patience to withstand all these inconveniences which will bother you more in the kitchen and the washroom areas.
You are the best judge of your needs but you should weigh the pros and cons before making a decision.
Buying A New House
Buying a new home is an exciting and tiring ordeal. However, the thrill of moving into a new home can often overshadow the frustration that comes with searching, negotiating, and being out bided. The home buying process is very lengthy. Thus, you should be prepared to devote a lot of time and energy to making your dream a reality. Here are a few tips to help smooth the home buying process.
Fix Credit Blemishes and Errors
Credit reports are critical to the home buying process. Sadly, many young adults and first time homebuyers minimize the importance of maintaining a good or fair credit rating. Although various mortgage programs exist to help bad credit applicants get approved for a home loan, these loans have higher interest rates. To ensure a low rate mortgage, which will also lower your mortgage payments, improve your credit rating.
If your credit score is at least 680, lenders consider you a prime candidate. As a prime candidate, you qualify for a low rate mortgage. On the other hand, those with credit scores below 600 can expect considerably higher rates.
Before applying for a home loan, check your own credit score. If your score needs a little improvement, delay purchasing a home for at least six months and raise your rating.
Choosing an Affordable Home
Naturally, pricier homes are more appealing. However, if buying a new home, realistically determine what type of home will fit into your budget. Many mistakenly purchase expensive homes, and can barely afford the payments. Avoid becoming "house broke." Ideally, mortgage payments should be no higher than 36% of our total monthly income. This way, you can comfortably pay your mortgage and care for other household expenses.
Get a Lower Interest Rate with a Down Payment
Although down payments are not mandatory when purchasing a home, they will help you secure a low rate mortgage. Moreover, with a 20% down payment, you do not have to pay private mortgage insurance. Planning for a down payment takes time and discipline. It may require cutting expenses, or sticking to a strict budget. However, the results are worth the sacrifice.
Both Neil Parnham & Carrie Reeder are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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