Written by Jaymi Naciri
Should you stay or should you go? It’s the premise of the popular HGTV program “Love it or List it” and also a dilemma for countless homeowners today.
Many of us can relate to the issue raised on the show. But we don’t all have $100,000 and a team of designers to make our old home sparkle again. So how do you know when it’s time to cut and run or reach deep into the pockets to make the necessary changes to make your home function for you again?
WHEN TO STAY
Your mortgage is close to paid off. You’re almost done with monthly payments and about to own your home outright. Buying a new home would mean taking on a new 15- or 30-year mortgage, or coming up with a hunk of cash. Unless the house you are moving to is a far better fit for your lifestyle or you need to sell in order to downsize, experts recommend staying put.
You credit stinks. If you’re not going to qualify for a new loan because of bad credit or if you may qualify by the skin of your teeth—which would mean putting more money down and/or paying a higher interest rate—it might not be worth it to move.
“Depending on when you last bought a home, getting a mortgage may be harder than you remember,” said FrontDoor. “Lenders will closely review your income, debts, assets and liabilities, to make sure you don’t exceed the maximum debt-to-income ratio. Hopefully you didn’t do any damage to your credit since your last home purchase. The most competitive interest rates only go to buyers with credit scores above 700.”
You have money to renovate. Your kitchen is an embarrassment, the yard you once imagined as an outdoor oasis is more like a mirage and don’t even ask about that weird rippling thing that going on with your floors. Maybe you don’t need a new house. You just need the house you live in to be new again.
Depending on how much savings your have or how much equity you can take out of your house, you could overhaul and reenergize your existing home. Even small changes that improve function or address important daily issues can make a big difference. Be sure to consult your Realtor for guidance on the changes you plan to make. That way you can ensure a decent return on investment so you can recoup some dollars when you are ready to sell.
You need to stay in your neighborhood and there’s no inventory in your price range. The tighter your parameters, the harder it can be to find the right home. If you need to be in a certain school district and can’t find a home in the right district zone perhaps it makes sense to put off the move.
WHEN TO GO
The kids are gone. It’s been a great family home, but, memories aside, do you still need all that space?
“Do you find yourself walking into empty rooms wondering when the last time you vacuumed in there was? Having trouble deciding whether to convert your children’s old bedrooms into the sewing room, home office or media room? You have too much house,” said REALTOR and best-selling author Michael Corbett on Huffington Post. “Once the kids have left for college, Mom and Dad are left with an empty nest. Downsizing to a smaller home could be your reason to sell now.”
You can cash out, and cash in. All that equity you have in your house can be rolled into a new loan on a larger, more updated home. And the interest rate might even be lower than what you are currently paying.
It would take the operating budget of a small country and the patience of 12 saints to get your house where you need it to be. “That orange countertop that seemed so retro and modern just looks like an old countertop in a bad color. The shower needs to be re-done and the floors have gotten so bad even the dog doesn’t want to come inside,” said She Knows.
“So then you start to dream about remodeling. And you probably get so caught up in the end result that you start to think this is actually a viable option. It’s not. It’s months of living in disorganized, sheetrock-dust covered filth and eating cardboard pizzas. Just save your money, your marriage and your sanity, and move into a new house already.”
The neighborhood is changing. It was perfect when you moved in. Friendly neighbors, block parties, lemonade stands. But now you find yourself looking over your shoulder on your evening walk and double-checking your door locks before bed.
“Are you up all night from the neighbor’s barking dogs? Are you noticing a spike in crime or even more police activity as of late? A neighborhood moving in the wrong direction can be a very compelling argument for a sell and a move,” said Huffington Post.