Stay if you love your neighborhood.
Hire someone to help with decluttering and organizing. Your house is not terribly small.

Anonymous wrote:

Anonymous wrote:We love our neighbors and neighborhood. We have been in the same house for 10 years and have out grown our house. We have 3 young kids in 2600 sq ft 4 bedroom 2.5 bath with 2 WFH parents.

Would you do a major $200K renovation on house or sell and buy a larger house?

A new house recently came up on the market that is 4200 sq ft 4 bedroom 4 bath for $1 million.

We could probably get $950,000 for our existing house (bought it for $700,000) and have about $450,000 on the mortgage plus a $100,000 HELOC to pay off.

We have a very low interest rate which makes me nervous to even look at a new house. But we really need more space. What would you do?

You're 10 years into your mortgage which means you've hit the point where your monthly is going more towards your balance and less towards interest.
You have 2600 sqft, 4 beds, 3 baths.
You have an interest rate that is likely 50%-60% lower than any rate you could get today
If you sell you will have to pay off that $100K HELOC, so you actually owe $550K not $450K
You admitted that the home you're interested in is likely under priced, and there's no guarantee you would get the house.

I don't get why you're even debating selling. Stay where you are, stick it out and try to make it work without a full renovation. Your home is not tiny! And you love the neighborhood.

+1 - also, no one has mentioned the realtor fees + other costs to sell your home, which should be factored into the equation.

Anonymous wrote:Renovate.

It’s the devil you know.

LOL not until you open up the walls, renovating sucks especially for pre 90s homes

Sell!! You cant do much for $200k.

Renovate.

It’s the devil you know.

Renovate.

Anonymous wrote:We love our neighbors and neighborhood. We have been in the same house for 10 years and have out grown our house. We have 3 young kids in 2600 sq ft 4 bedroom 2.5 bath with 2 WFH parents.

Would you do a major $200K renovation on house or sell and buy a larger house?

A new house recently came up on the market that is 4200 sq ft 4 bedroom 4 bath for $1 million.

We could probably get $950,000 for our existing house (bought it for $700,000) and have about $450,000 on the mortgage plus a $100,000 HELOC to pay off.

We have a very low interest rate which makes me nervous to even look at a new house. But we really need more space. What would you do?

You're 10 years into your mortgage which means you've hit the point where your monthly is going more towards your balance and less towards interest.
You have 2600 sqft, 4 beds, 3 baths.
You have an interest rate that is likely 50%-60% lower than any rate you could get today
If you sell you will have to pay off that $100K HELOC, so you actually owe $550K not $450K
You admitted that the home you're interested in is likely under priced, and there's no guarantee you would get the house.

I don't get why you're even debating selling. Stay where you are, stick it out and try to make it work without a full renovation. Your home is not tiny! And you love the neighborhood.

Anonymous wrote:You love your neighborhood and your neighbors: priceless

Renovate

If the finances work, this.

OP, we are in the exact same situation. Our mortgage rate is 2.5% and home purchased at $630K in 2014 (nearly 3K sq ft). We love our neighborhood and kids are within walking distance to schools. Our HHI has also gone up significantly so we could afford a much larger house.

We looked at new construction homes in the area but opted to go for the renovation. We did a major renovation in 2018 where we did kitchen, added a new bathroom for one child, and renovated the existing bathrooms & bedrooms. Our renovation project this year will be an extension on the living room to add space and fix basement.

The extension is costing us about $115K (not including basement). We figured that it wasn't worth it to lose our 2.5% mortgage and move to a bigger place. Our oldest will be entering HS and we won't always need a huge home. The lifestyle we keep with kids walking to school is unbeatable. I'm never in the car, which is great. I also don't want to start over meeting new neighbors and getting to know a new area - even if its close by.
Finally, I love having the financial freedom of a low mortgage. It means that we have no stress. If one of us loses our job, gets sick, or we have a change in circumstances, we can handle it. We also save a ton and go on great vacations.

The homes we looked at were $2-2.5M. That's an insane amount for a house. I just cannot fathom it.

Best of luck

Anonymous wrote:OP, I’m puzzled - how can a substantially larger home in the same neighborhood cost only marginally more than your current home (1 million vs 950k)? If that’s true, then you should move. Otherwise it might be that the larger home is in poorer condition that you need to renovate anyway. Then you should stay and renovate over time.

Op here - I am not sure either. I think the other house is under priced.

Redfin estimated our current house at $960,000. So I think we could get close to that. We have done a lot of upgrades to the house. We just need more square footage.

OP, I’m puzzled - how can a substantially larger home in the same neighborhood cost only marginally more than your current home (1 million vs 950k)? If that’s true, then you should move. Otherwise it might be that the larger home is in poorer condition that you need to renovate anyway. Then you should stay and renovate over time.

Anonymous wrote:Your mortgage is 450, heloc is 100 and reno will be 200k (minimum). Are you using cash for this reno? If not, your debt on the current house will be more than your new house. If you are using cash, you can put down a larger down payment on the new house to offset the interest increase) your equity in current house + 200k reno money). You can also always refinance if rates go down.

Assuming this house is still in your neighborhood, sell and move.

Op - if we did a reno it would be after we pay off the HELOC and we would do it with cash. So we probably wouldn’t do it for another few years.

Depending on what we could sell our house for we could probably put close to 30% down on a $1 million house. If not more.

Your mortgage is 450, heloc is 100 and reno will be 200k (minimum). Are you using cash for this reno? If not, your debt on the current house will be more than your new house. If you are using cash, you can put down a larger down payment on the new house to offset the interest increase) your equity in current house + 200k reno money). You can also always refinance if rates go down.

Assuming this house is still in your neighborhood, sell and move.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What do you plan to do in the renovation? I don't think you could turn your house into something like the 4200 SF 4BR/4BA for 200K. Adding 1400 SF plus 1.5 BA and renovating everything else is going to be more than that (double, probably).

If the other house is in your neighborhood, I'd seriously entertain it. You don't want to manage a major renovation with three young children and two full-time jobs. At some point, isn't it worth something to just have the space you need and be able to focus on your family?

Op - we would finish the basement to add a bathroom and rec room and then probably blow out the back of the house to make a large family room and expand the kitchen. But yea it would be expensive and horrible to live through.

I am just nervous about a) a new mortgage with a high interest rate, b) leaving our neighbors who would still be close by but not next door and we are very close to them and c) trying to sell our existing house.

We put $200k into a renovation to expand and we love our house so much now. The reno was definitely annoying but to us, it was worth it. And having our same low mortgage payment (also low interest) is great. I want to stay here forever.

Op here - did you stay in your house during the reno or did you move out? How long did it take?

Anonymous wrote:

Anonymous wrote:What do you plan to do in the renovation? I don't think you could turn your house into something like the 4200 SF 4BR/4BA for 200K. Adding 1400 SF plus 1.5 BA and renovating everything else is going to be more than that (double, probably).

If the other house is in your neighborhood, I'd seriously entertain it. You don't want to manage a major renovation with three young children and two full-time jobs. At some point, isn't it worth something to just have the space you need and be able to focus on your family?

Op - we would finish the basement to add a bathroom and rec room and then probably blow out the back of the house to make a large family room and expand the kitchen. But yea it would be expensive and horrible to live through.

I am just nervous about a) a new mortgage with a high interest rate, b) leaving our neighbors who would still be close by but not next door and we are very close to them and c) trying to sell our existing house.

We put $200k into a renovation to expand and we love our house so much now. The reno was definitely annoying but to us, it was worth it. And having our same low mortgage payment (also low interest) is great. I want to stay here forever.