With money woes all over the place, many people will be forced to ask themselves some tough questions for survival. Many more will learn important lessons about money management than they ever imagined they needed to know. As we struggle to make the right financial decisions, it can sometimes seem overwhelming, especially when it comes to the big-ticket items like your home.

With money being tight and budgets being strict, every decision we make concerning money can mean financial life or death and if you are facing the decision about fixing up your home or trading it in, there are many things to consider, both good and bad.

The Pros and Cons of Staying Where You Are/Cons of Buying New

  • If you are leaning towards staying in the home you already own, you may end up spending less money to fix it up than to move to an entirely new place. If you need a loan and have sufficient equity in your home, you may be able to take out a small loan to cover expenses at a low interest rate.
  • If you stay in your home, you do not have to deal with the frustrations and expense of moving and selling your home.
  • You obviously will save money on new home costs, such as closing fees, loan charges, inspection services, and realtor fees.
  • There will not be a long, drawn out process to qualify for a new mortgage. As more and more industries are making it harder to make any financial transaction, it may save you a ton of money and time by not having to qualify and secure a loan during such rocky times.
  • Fixing your home generally allows you to make it a multi-step process. As funds and time become available, you can make improvements to the home while still living in it. If your money situation changes for the worse, you don’t have to worry about not being able to afford the new mortgage payment each month.

Pros of Buying New/Cons of Fixing Up the Old

  • Because the housing market is so unstable, it is essentially easier to find a good deal on home prices, as there is currently an excess of homes for sale. Builders will also offer deeper discounts on new homes in order to stay in business and avoid the costs of maintaining empty homes.
  • While it may take a little more than usual to qualify for a home loan, the interest rates you can receive once approved may be the lowest they have been in all-time.
  • Unlike with a home improvement job, buying new may require a lot less maintenance and repair initially, allowing you time to save up money for emergencies.
  • There is no inconvenience of remodeling projects in your daily life. You don’t have to worry about your family’s health or safety during construction.

Overall, your biggest decision and concern should be if you can truly afford either project. You need to understand the consequences and know you are secure with your employment and your family’s general welfare before making any financial decisions concerning your home.