Is a Major Home Renovation Worth It in the Long Run?

Recently, we shared “7 Factors To Consider When Choosing A Home To Retire In.” For some homeowners, these seven factors can be taken into account with a home renovation, but is it worth it to remodel or change floor plans?

Let’s look at this example.

 

Let’s say you have a 4-bedroom colonial style home in a great school district. The neighborhood is amazing, and you are very comfortable there, but your kids are all grown up and the original benefits of the home no longer apply.

You’ve always wanted a huge master suite and are considering merging 3 of the smaller bedrooms on the second floor to achieve this dream.

In the short term, you are over the moon excited about your newly renovated oasis.

In the long term, when you go to sell your home down the road, you’ve now taken a 4-bedroom home in a great school district and turned it into a 2-bedroom home. Your pool of potential buyers has shrunk significantly and so has the value of your home (unless you are able to find someone who has the exact needs you have today!).

Why not consider listing your 4-bedroom home now and moving into a gorgeous 2-bedroom with a master suite? Your house can become a home for the next family looking for that perfect neighborhood with a great school district to raise their kids in!

You may even be able to achieve your dream in the same area you love, without having to give up your favorite restaurants and grocery stores.

Bottom Line

If you are debating a major renovation that would change the layout of your home, before you pick up that sledgehammer, let’s get together and discuss the available listings in our area that might meet your needs today!

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You Don’t Need a Down Payment

What's the biggest obstacle to homeownership for prospective buyers?

Selling a home? Get a free home value report

Buying a home? Search all homes for sale

According to a recent survey, not being able to save up enough money for a down payment comes in at the top of the list. 55% of prospective homebuyers cited this as their main stumbling block to achieving homeownership.

With the continuing growth of home prices, things aren't getting any easier for them. In fact, homeownership rates reached a 20-year low last November.

It might be hard to imagine, but just a decade ago many lenders offered easy, no-money-down mortgages. Anyone with a pulse could qualify for one. However, after the financial crisis, mortgage standards have become more restrictive. A typical mortgage now requires a 20% down payment.

If you have decent credit and a steady income, you might also qualify for a number of specialized programs that require little or no down payment.

First, there's the USDA loan, which is valid for homes in certain regions, such as rural and suburban areas. With zero money down and lenient credit requirements, the USDA loan can be a great choice..

Second, there’s the VA loan, which you can apply for if you or your spouse served in a branch of the military. It's possibly the most generous zero-money-down mortgage because of low interest rates and low closing costs.

Third, there's the FHA loan. It does require a 3.5% down payment, but that is much more achievable than the 20% required for a conventional mortgage. There are also a number of credit unions and first-time homebuyer programs that might apply to your particular situation.

There’s one more important thing you should know. If you decide to get one of these no-money-down mortgages, chances are good you will have to pay private mortgage insurance, which can drive up your monthly payments. Private mortgage insurance will disappear after your mortgage balance is under 80%, and the money you do pay will be tax deductible in most cases.

As you can see, there are lots of options to make owning a home a reality for you, even if you haven't saved up tens of thousands of dollars.

If you need any advice on getting a no-money-down loan, give me a call at (859) 983-7999. I can put you in touch with some experienced lenders who can answer your questions and help get you started. I look forward to hearing from you soon.

3 Questions Every Greater Lexington Buyer Should Answer First

I recently came across an article relevant to buyers and sellers in the Lexington area. Our office has access to tons of real estate resources not available to the public. We’re happy to simplify this exclusive information for you.

According to Keeping Current Matters, there are three important questions prospective buyers should ask before committing to buy a home.

Why am I buying a home in the first place? Forget finances for a moment and consider the real reason you’re buying a home. Often, buyers pursue a purchase because they want a home to raise a family, feel safe, have more space, or have control over space.

Where are home values headed? Home values are projected to increase by 5.3% over the next 12 months.

Where are mortgage rates headed? Think about the long-term cost. The graph below reveals what industry professionals predict interest rates will look like this year.

The bottom line is that only you and your family will know the right time to buy a home. If you’re thinking about buying or selling a home, I’d be happy to discuss your real estate needs.

For those thinking of selling, click here to find out the value of your Lexington home.

If you're considering buying, click here to search all Lexington homes on the MLS.

If any questions or concerns arise, please reach out to us. You don’t have to worry about contracts or obligations of any sort. We’re happy to help at any capacity, so you can make the best decision for your family.

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