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When Your Family Outgrows Your Home

Should you buy bigger or build bigger?

Many of our members find that their home suddenly becomes too small for them, once kids come along. When you need more space, you have two options: renovate to increase the size of your current home, or move to a bigger place.

 

Staying put, building bigger

 

Donna Lidster and her family needed more space after the birth of their daughter. For almost two years, Donna and her husband, Scott, tried to find a bigger house in their neighbourhood.

 

“We really wanted to stay in the area but didn’t love any of the houses within our budget,” remembers Donna. “So we decided to renovate the whole house and build a second storey, to have the perfect house for us.”

 

Hiring a trustworthy builder was the most important decision Donna made. “We’d heard nightmare stories about contractors who took a lot longer to finish than they’d promised, or charged a lot more than the original quote,” says Donna. “Before hiring our builder, we talked to three couples who had hired him for the same kind of project. They loved what he had done and he finished the work on time and on budget.”

 

Donna’s builder delivered on his promise to finish work in four months, on budget. But it did take a lot of planning.

 

“We spent a year preparing,” says Donna. “We had to get designs drawn up and building permits approved, as well storing our stuff and finding a place to live for four months.”

 

For Donna and Scott, this wasn’t just a way to get their ideal home; it was also a good investment. Their house is already worth 25% more than what they paid for it and spent on renovations.

 

When buying bigger is the only option

 

For Tim Faber and his wife, Leanne, renovations were not an option when their family outgrew their two-storey, semi-detached house. There was no space to go out or upwards, so they had to move to a bigger house.

 

The first thing Tim did was to find a lender that would give them a good rate on their mortgage. “I went with a mortgage broker because my bank just wouldn’t offer me competitive rates,” he says. “When I told my banking rep the rate our broker was offering, she told me the bank wouldn’t even give her such a low rate and she works there!”

 

Tim and Leanne had a budget that they needed to stick to and found that any house within their range needed some renovations.

 

“Our new house needed work, but we didn’t fully estimate the cost of what needed to be done or realize how soon we would be doing it,” says Tim. “The furnace went sooner than we’d hoped and cost more to replace than we expected. Electrical work in the attic cost a lot more than we’d hoped as well.”

 

These extra renovation costs led Tim to wish he had done one thing differently.

 

“We have lots of equity in the house, enough for a big line of credit, which we have needed to tap into to pay for the renovations,” says Tim. “We should have arranged for a line of credit when we got the mortgage on the new house. It would have saved us a lot of time and money.”

 

Here are some useful tips when you’re considering moving or renovating:

 

Tips for moving to a bigger home

 

Shop around for the best mortgage rates or hire a mortgage broker. You can check on Chinook’s current mortgage rates here.

Talk to a Financial Services Representative to discuss the best way to finance your purchase. They can advise you on the best mortgage for your circumstances and whether a line of credit is the best option to pay for any future renovations.

Be fully aware of all of the costs and fees you will need to pay: your realtor, lawyer, appraisal, survey, removals and property/mortgage registration. If your current mortgage isn’t portable, your bank may charge you hefty penalties for breaking it.

Negotiate the commission rate with your realtor or consider flat-fee, full-service realtors. Even a 1% reduction in commission can save you thousands of dollars.

 

Tips for renovating your home to get more space

 

Talk to your Financial Services Representative to find the best financing solution for you. A refinance mortgage may be a cheaper solution than a home equity line of credit.

Find a builder whose work you can go and see and whose customers you can talk to - this could be the most important decision you make.

Consider hiring an interior designer, it will make the whole process a lot less stressful. Their discounts with home suppliers can save you almost as much as the designer’s fees.

Get your neighbors involved by meeting up with them to discuss your project. This way they feel part of the process and will be less likely to block your development plans.

Be prepared for disruption - you may have to move out of your home for many months. If you do move out, try and stay close to home - contractors often want to run things by you so it will save you time if you’re nearby.

Ask your builder about renovation rebates - if you improve your home’s energy efficiency you can get up to $6,000 in rebates.

 

Free advice from your local Credit Union

 

We have helped thousands of our members to buy a bigger home or build more space and we are always happy to give advice. Before you make any decisions, come in for a chat with your Chinook Financial Services Representative.

 

We can help you calculate all of your buying/renovation costs and work out the best financing solution for your situation. We will help you to save money, move or renovate with less stress and keep your retirement plans on track. Click here to book a session now or phone your local branch.