Should You Remodel or Move?
As life evolves, so do our needs. The home you once thought would be your forever space may no longer be the right fit. When that moment arrives, you're faced with a big decision: stay and renovate, or sell and start fresh in a new place?
This isn’t a one-size-fits-all situation. If you love your current neighborhood and want to stay put, remodeling might be the better route. On the other hand, if your current home simply can't meet your needs—whether because of space, location, or lifestyle changes—moving may be the smarter option.
Let’s explore the pros and cons of both choices and how either a home equity loan or a new mortgage can support your next step.
Advantages of Moving
If you are leaning toward listing your home and moving on, here are a few potential benefits:
- Skip the Construction Hassles
Avoid the noise, mess, and disruption that come with major renovations. - Adjust to Family Needs
Whether you’ve outgrown your home or are looking to downsize, a new home can better match your changing household needs. - Some Issues Can’t Be Renovated Away
Remodeling won’t fix everything—like changing school districts, increasing your yard size, or cutting down your commute. - Ready-to-Move-In Appeal
Buying a move-in-ready home can eliminate the stress of ongoing projects. - Leveraging Your Investment
If you’ve built up significant equity, you may be able to use it to cover moving expenses and reduce your mortgage on a new home.
Advantages of Remodeling
For those emotionally attached to their current home, remodeling offers some compelling upsides:
- Homes Are Expensive to Buy & Sell
Remodeling will allow you to save the real estate agent’s commission, closing costs, attorney fees, and the expense of prepping the home for sale, which could be thousands of dollars. - Personalize Your Home
Remodeling your current home allows you to customize your home with everything you want. From paint color and finishes to room size and custom features, you can have it all. - Keep What You Love About Your Home
When you remodel, it changes the things you don’t like, but it also lets you keep the things you love like your neighbors, short commute to work, your child’s school, and more. - Increase the Value of Your Home
Home renovations mean an increase in home value. Making savvy choices during your home remodel can improve your living space but also add value when you make smart choices and well-thought-out additions or improvements.
Mortgage Pros and Cons
Home Mortgage Pros
- Leverage Existing Equity
Use the equity from your current home for a larger down payment on a new one. - Predictable Payments
Monthly mortgage payments are typically structured to be affordable and consistent.
- Possible Tax Benefits
Mortgage interest may be tax-deductible—check with a tax professional to confirm your eligibility. - Long Repayment Terms Available
Spreading payments over 10 to 30 years allows you to buy a home now, preserve your cash flow so you can continue to save and invest, and repay over the loan term as your income continues to grow over time.
Home Mortgage Cons
- Losing Your Low Fixed Rate
Selling your home often means giving up a historically low mortgage rate on your current mortgage. - Market Fluctuations
Real estate values can drop, potentially during a period of severe market downturn, leaving you owing more than your home is worth. - Interest Accumulation
Over time, mortgage interest can significantly increase the total repayment amount. - Long-Term Debt
A new mortgage can mean decades of repayment. - Foreclosure Risk
Missed payments or unpaid property taxes could lead to foreclosure.
Home Equity Pro and Cons
Home Equity Loan Pros
- Keep Your Existing Mortgage
Preserve your current low-rate mortgage while borrowing separately for renovations. - Low or No Closing Costs
Home equity loans typically have fewer fees compared to traditional mortgages. - Faster Closing
With fewer steps involved, home equity loans usually close much more quickly. - Lower Rates
Since these loans are secured by your home, they often come with lower interest rates. - Fixed Payments
Set monthly payments make budgeting easier over the life of the loan.
- Tax Deductible Interest
Home Equity Loan interest paid may be tax-deductible—check with a tax professional to confirm your eligibility.
Home Equity Loan Cons
- Potential Repayment of Waived Costs
If you pay off the loan early or sell your home within a set period (often 36 months), you may need to repay waived closing costs. - Credit Score Requirements
Many lenders require a credit score of 675 or higher to qualify. - Foreclosure Risk
Just like with a mortgage, defaulting on a home equity loan could result in losing your home.
List It: When a Mortgage Makes Sense
If you’re ready for a new start and want a property that better suits your current lifestyle, a mortgage is often the most straightforward path. With multiple repayment terms and loan types available—fixed or adjustable—you can find a plan that fits your budget and future goals.
Love it: When a Home Equity Loan is a Better Fit
If you already own your home and have built up equity, a home equity loan may be the ideal way to fund improvements without refinancing your existing mortgage. This allows you to upgrade your current space while keeping the benefits of your original mortgage terms.
Financing Your New Move or Remodel with Finger Lakes FCU
If you can dream it – we can finance it. No matter which path you choose—remodel or relocate—Finger Lakes Federal Credit Union is here to help you finance your dream. Our experienced lenders can guide you through every step of the process, offering a full range of flexible lending solutions:
- Ready to Buy or Build?
Buy or Build that new dream home today with a new mortgage, and we can help you refinance it later when that time comes! Get pre-approved today, or if you have questions, please contact us!
- Thinking About Renovating?
Whether it’s a new kitchen, bathroom, outdoor space, or a full addition, we provide financing for projects of any size. We offer simple home improvement loans, home equity loans, and home equity lines of credit. Get pre-approved today, or if you have questions, please contact us!