Published 5/25/22
5 Things to Think About When Deciding Whether to Buy a New Home or Update Your Current House
When your house needs a lot of significant repairs to stay functional and comfortable for you and your family to live in, you may think the best choice is walking away from your current home and buying a new one. This is the right choice for some people, but others prefer to invest money into their current homes. If you are trying to decide which option is right for you, here are five things you need to think about.
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- Budget
The size of your budget is the biggest factor in whether you should buy a new home or improve your current one to meet your needs. A new house is a huge expense, and even if you qualify for financing, you need to have a sizeable down payment.
Your current home may need a lot of work to stay in good condition. You may want to contact a contractor to get an estimate on how much the repairs will cost. If the work will cost more than buying a new home, it’s not worth sinking money into the project. However, this is usually the more cost-efficient option.
- Current Real Estate Market
The state of the current real estate market also has a huge impact on your decision. If the housing market is strong, you can expect to spend a lot of money on buying a new house. You may also have trouble purchasing the house you want because there are multiple offers as soon as it hits the market. When the housing market is slow, you may be able to find the house of your dreams for a better price with less competition. The state of the market also affects the price you will get for your current home if you decide to sell it.
- Emotional Attachment
One study shows that 70% of Americans have emotional attachments to their homes. If you feel a strong connection with the house you currently live in, you may not be ready to move if you decide to buy a new house. Your emotional health may benefit more from upgrading your current home to meet your needs.
- Timing
Many people find the process of buying a new house and moving stressful. If you have other life changes that are stressing you out, now is probably not a good time to move. Only consider moving if you’re not in the middle of a major change such as bringing home a new baby, starting a business or adopting a pet to reduce stress.
- Credit Score
You need a good credit score to get a loan for a new house. If your credit history isn’t the best, you probably aren’t in a position to buy a new house at the moment. You may need more time to improve your credit score, or you can think about applying for alternative mortgage solutions.
One good option for veterans is a VA loan. This option doesn’t require you to pay for private mortgage insurance and usually has a little to no down payment feature. VA loans also feature better interest rates than most other types of financing. Review current VA loan rates to determine your best options.
Deciding whether to buy a new home or update your current one can be difficult. Think about these five things to make the best choice for you and your family.
– Shirley Martin
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