During High INterest Rates -
Adding onto Your Home -vs- Building or Moving.
When interest rates are high, it can be more expensive to obtain a new mortgage for a larger home, which can make moving less appealing. In such cases, building an addition onto your current home may be a better option for several reasons:
Cost-effective: Building an addition onto your current home can be more cost-effective than purchasing a larger home. Here is some simple math, a new 700k mortgage, with a 30 year fixed, at todays current rate of 7.41% (according to google) leaves a payment of $4,851.
If you have a current mortgage on a 400k house at 3.5% your payment is $1,796. Add a 300k remodel at 7.5% and your total payment comes to $3,894, still real money but $1,000 a month savings.
Secondly, familiarity with the area: When you build an addition onto your home, you get to stay in the same area and neighborhood that you are already familiar with. I know for my quaint town of Hopkins, many people move out as they outgrow their cute Hopkins home, but sorely miss the area.
Personalization: Building an addition onto your home allows you to customize the space to your specific needs and desires. You can design the addition to meet your family's current and future needs - we love the great room and fireplace we added onto our home - a total game changer!
Lastly, increased home value: Building an addition onto your home can increase the value of your property. When you decide to sell your home in the future, you can potentially recoup some or all of the costs associated with the addition.
Overall, building an addition onto your home may be a better option than moving when interest rates are high, as it can be more cost-effective, allow you to stay in your familiar neighborhood, and provide you with the opportunity to personalize your space while increasing your home value.
We are here for you.
Let us know,
Mike and Andy Higgins
612 991 9151