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I think part of that number has to do with the interest rates now verses then and the higher taxes. The extra $1000 a month factors in escrow, house payment, and insurance. The increase in price bumps all of those up. We are actually in a highly sought after neighborhood, great school district, great location, great neighbors, and one of the best lots in the neighborhood. It would be hard to get all of those things in the newer house.
I think part of that number has to do with the interest rates now verses then and the higher taxes. The extra $1000 a month factors in escrow, house payment, and insurance. The increase in price bumps all of those up. We are actually in a highly sought after neighborhood, great school district, great location, great neighbors, and one of the best lots in the neighborhood. It would be hard to get all of those things in the newer house.
well, that seems like a lot to walk away from - can you expand the house itself to make more room in the kitchen? (since you said before that making changes within in the existing structure wouldn't work)
[quote=GotHereQuickAsICould;52827990]Are new homes being built any better than homes built 20 years ago?
I think many are as the building codes in many locales have become enhanced.
For example, where I live in Denver, they just mandated hurricane ties because we have microbursts all the time.
This is our 2nd home and we bought it pre kids. It doesn’t meet our needs post kids very well... layout issues, so we thought about moving to a better well suited home in the same area...Here’s the kicker however...we’ve been in this house for 10 years (it’s 14 yrs old) and have a low interest rate and low payments. The new mortgage because this area has really grown in price, would be $1,000 extra per month on a newer 4 to 5 year old home. Since our home is 14 years old, we are going to have major system replacements in the next 8 years such as roof, hvac x 2, exterior paint again, carpet, refinish hardwood floors, and kitchen or bathroom renovations in the next 10 years. We plan on staying in either this house or the next 13 more years. Our current house would be close to 30 years old at the time and def would require renovated rooms to sell. As of right now...everything is still on trend.
Calculating the financials of staying verses going and having a $1,000 extra on the payment, on paper it appears to be fairly even since our current house will require a lot of money dumped into it. Our income is around $140,000 and would be looking at a 3 to 5 year old house around $440,000 with 20% or more down. The newer home will be a while before systems fail and won’t require renovations, although the payment $1,000 more per month and the interest rate much higher than our current one. We bought the current one for 290,000.
Is it smarter to just stay and dump a lot of money into this one or just buy the newer upgraded place if you were in our situation?
I think that people buy way too much house for what they really need.
Paying that extra $1000 per month just isn't worth it over a layout issue in your current home. Imagine if jobs were lost or health matters drained you. Imagine how much you could contribute to your children's education or invest in your retirement fund instead.
You can make renovations to the young house you already have and save yourself a bundle of money and a life of stress overpaying for a larger home. It's better spent investing in the home you have.
I'd find out how much your home is worth today and after you do planned renovations.
I think part of that number has to do with the interest rates now verses then and the higher taxes. The extra $1000 a month factors in escrow, house payment, and insurance. The increase in price bumps all of those up. We are actually in a highly sought after neighborhood, great school district, great location, great neighbors, and one of the best lots in the neighborhood. It would be hard to get all of those things in the newer house.
Great neighbors, great school district?
Then stay there. Figure the kitchen out.
Get some different ideas. Start saving. We remodeled the kitchen in this house for under $15K. Could have gone cheaper if we had been willing to use the cabinets you put together yourself. We shopped around and found a cabinet maker and granite installer for half of what we were originally quoted.
Sounds like you are worried about the roof, the air conditioner, and think a new home will not require as much invested. Maybe. Maybe not.
You are also concerned about updating in 13 years. Cross that bridge when you come to it.
If you have a great school district and great neighbors, plus a low interest rate, figure the house out.
Are new homes being built any better than homes built 20 years ago? I don't know about that.
The two things that jump out to me are the school district and the kitchen.
If this isn't a decent school district and the kitchen isn't working, then it is time to look at neighborhoods with decent school districts and kitchens that would allow the whole family to cook together.
We lived for years in a house with a dreadful kitchen. Cost $40K+ to renovate it and took us four years to save up.
These were the four years that our kids were in middle school and wanted to help cook, but there simply wasn't room. We tried.
By the time they got to high school, we had a workable kitchen, but by then we had missed the moment.
We stayed in that home for years and came out all right.
When we bought our current home, I looked for an undervalued home in and undervalued neighborhood. Sic years later, homes around us are selling for 50% more.
Most houses today are not being built any better than houses 20 years ago. In fact imo the build quality has gotten lower because it’s a way faster pace. The materials are better in some ways worse in others.
Op is in a great school district by their post. 40k is a lot for a kitchen, but are you enjoying it? I did complete kitchens in my houses and they worked fine but I never paid 40k for one.
The kitchen may not be the ultimate kitchen but most families simply do not all get together to cook. I have a decent size kitchen and with me and my wife it’s crowded. Most families do not cook together the way you describe it. Most kitchens (unless you’re talking huge houses) do not have huge giant kitchens where you have 3/5 people all cooking/prepping in there. They just don’t. Realistically you rarely have houses where the whole family cooks together simply because you would need a kitchen the size of a two car garage with the counter space to go along with it. Most houses do not have that size kitchen. The ones that do are giant McMansions. Even most big houses do not have gigantic kitchens. The kitchen might be in a great room which makes the kitchen seem bigger but most kitchens aren’t that big.
I guess if cooking with your kids is worth 1,000 bucks a month for 180/360 months at the tune of 180,000/360,000 dollars then I guess buy the bigger house with a huge if it means that much to you.
Interesting feedback. I am also contemplating similar situation. I live in a Town House, which will require aprox. $50k in renovations, including kitchen, 1 full bathroom and 2 half, painting and new carpets or hardwoods. The kitchen has been somewhat updated before I purchased it but it's lacking storage and the cabinets are original, just repainted. My other major issue is that the walls in the TH are thin, and I can hear my neighbors running up and down the stairs while I'm in my bedroom. I live with my 17 yr. old niece who will be going to a community collage next yr, which is aprox. 2 miles away. I am think about buying a single family house because my elderly mother, who lives in another state, maybe move in with me, so I want her to be comfortable.
So I am considering selling my rental TH and use the equity from my rental to purchase a single family home. My dilemma is, even with the significant down-payment, my new mortgage would be aprox. $1400 per month. I rationalize purchasing a single family house because I believe where I live, a single family house would appreciate in value much faster than a TH. But then I contemplate if it would be worth it? I am about 10-13 yrs.away from retirement and think about the cost/benefit. Especially I don't think I will stay in this area once I retire.
It was interesting to read that most of the posts advised the original writer to stay rather than move. The responses gave me some food for thought. Especially when I think about the closing, moving and maintenance costs of a single family home.
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