My colleagues below have given some fine answers..and of course it all depends. If you got a bid for 2nd story of 200k..bank on it being about 20% more..and being a nightmare! I don't know too many people including myself who would want to go through that again. Yeah it's nice when it's done..but the time and inconvenience involved typically will not be worth the expense.
IF your house is perfectly salable now..and has the buyers' hot buttons covered..updated kitchen and baths and decent floor plan..then take advantage of the market conditions..The lower priced homes are still moving quicker than most of the higher priced ones..so that should help..one thing my colleagues did not mention..is the selling and buying costs..you should perhaps consider this as part of the big picture.
Should you need some assistance or have further questions..more specific..feel free to contact me.
Erik J. Weisskopf, ABR,CDPE,CRS,GRI
What is your current situation? Your decision needs to take several factors into consideration. Are you maxed out for space? How does your current home's value compare to the rest of the neighborhood? Will adding a 2nd story make your house the most expensive house in the neighborhood or will it put your house in line with the other homes? Lowering your monthly payments sounds like a great idea. Make sure that that your monthly savings for the period you plan to own your home, moving forward, are greater than the closing costs to refinance your house. I hope this helps. Feel free to give me a call if I can be of further assistance. There are many great opportunities in McLean.
As you have probably gathered, a lot depends on your particular situation. Not knowing anything about your situation, in today's economy I would suggest buying a new home while home prices are still low. I dont think you will get the same bang for your buck when adding a second story to your home. Unfortunetly many home owners feel that if they put $200k worth of improvements in a home then it is automatically worth $200k more (which normally isn't the case). Your newer and larger home in McLean will more likely appreciate in value as the market improves. For example, if your current home is worth $400k and market values improve by 10% then you will gain $40k in equity; however, if you buy a home now for $600k and the market increases by 10% then you are now gaining $60k in equity. When you add current prices to what interest rates are today, it is a great time to use leverage and improve your buying power; as well as, making a great investment.
You can refi to get lower montly payments also; however, I would put whatever the difference is between your old payment and your new payment towards the principle of your mortgage. In essence the amount of money you pay each month shouldn't change, this strategy will help you pay your home off sooner.
Hope this helps.
The interest rates are at all time lows so it is a good time to buy or refi, without knowing all the particulars of your situation it is hard to say which is the best move for you right now.
Please feel free to contact me if you have any more questions or need help.
2) You can find out this coming sping next year. it is already too late for renovation currently
3) Yes, please find out no closing cost option for refinancing
Let me know if you have anymore questions
1. If you increase the size of your house, how will it look for resale in your neighborhood?
2. How much will it cost you to refinance for lower monthly payments? How long do you plan to stay in your current house?
3. Will your payments be significantly lower?
4. Do you have children in school or other significant issues keeping you in McLean?
5. How much space can you get for $200,000 ? How much inconvenience are you considering?
6. Can you afford to buy a new larger, newer house in McLean?
If I can help you answer any of these questions, please call.
Prudential Carruthers Realtors
My gut reaction is to suggest you sell and buy up. While the value of your home is down, the one you want to buy is down as much or more. Leverage is on your side if your desire is for a larger more expensive home.
Construction costs are down, but many remodels and additions don't return the expense of adding them plus the hassle of living through the mess for months or making other arrangements for a place to live.
A refinance costs money that you can put toward your new house & mortgage.
If you do not need any more space, then just refi and lower your monthly payment. If you do take a little money out, you could enjoy it by making improvements to your home that you can use and enjoy.
If you need more space, then it may be worht your while to either add a send story or buy a new home. That would have to be carefully studied, depending on your neighborhood and the comps. If your street can support the addition, and still get that money back when your sell, then it is a good idea. BUT if the comps do not support one home with a $200K addition, then it would make more sense to sell your home, and buy a larger one.
A lot to think about, so good luck.