Should You Remodel or Move? Here’s How to Decide


If your current home is not working well for you, you have two primary options. One option is to remodel and the other is to move.

In some cases, moving is the better choice, but in others you should remodel. To help you decide what makes sense for you, ask yourself these key questions.

What is your mortgage rate compared to the current rate?

One of the single most important factors to consider is whether you would end up having to pay a much higher mortgage rate if you move now.

Mortgage loan rates repeatedly hit record lows during the pandemic, but anyone who bought a house in the last decade — up until late summer of 2022 — probably has a mortgage rate under 5.00%. Now, unfortunately, rates are hovering around 7.00% to 8.00%.

Giving up a low-interest mortgage on your current home to get a much more expensive loan now may not make sense. So if you have a very low rate on your loan, chances are good that remodeling would make sense rather than getting in touch with a mortgage lender to buy another home now when both home prices and rates are high.

Will you be over-improving the home for the neighborhood?

Before you remodel, you need to consider whether doing so would cause your home to be too high-value for where you live.

More: Check out our picks for the best mortgage lenders

See, most people don’t want a house that is significantly more expensive than the homes around them. Neighborhoods at certain price points typically cater to people within that price range — not those who could afford a much costlier home.

If you have over-improved, you’ll have the “best” house in your neighborhood but it will be worth more than most buyers want to pay for homes in the area. In this case, you’ll likely end up losing a lot of money on the upgrades you made when you do decide to sell in the future.

If you can’t make your home the way you want it without making it an outlier where you live, moving could be the better bet.

Are you comfortable managing a remodel?

Remodeling a property is a lot of work. You’ll need to find contractors, make sure they do the work properly, figure out a way to finance the construction costs, and deal with problems that arise. You’ll need to make sure the contractor gets the proper permits. And you’ll need to make a zillion tiny decisions and hope that your project comes out matching your vision in the end.

Not everyone has the time and ability to do that — or the willingness to live in a construction zone while the project is being done. If you dread the idea of spending every weekend visiting design centers to try to figure out what your remodel should look like, moving may be a better bet.

How much would remodeling cost you versus moving?

Finally, you’ll need to compare the costs of remodeling to the costs of moving to see which would result in a bigger hit to your savings account. If you could get the home you want for $50,000 more by buying a new property, but turning your current house into your dream home would cost $100,000, then moving is a better idea for your finances.

Ultimately, you need to consider all of these issues to decide which course of action is best. It’s a big decision, so take the time to think about it and run the numbers before moving forward with either choice.


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