Im A Widow, And Want To Move From Chicago To A Warmer Climate. But Most Of The Homes Ive Found Need A Lot Of Work. Are There Any Cons To Buying A New House?

I was recently widowed without life insurance and on a limited income. I have a house in Chicago with an outstanding mortgage of $137,000. My monthly payments are $1666.

I recently found out that I can get a VA loan, so I'm thinking about downsizing to a 3 bedroom ranch and moving somewhere warmer, maybe South Carolina. I also hope to sell my house and put it up for sale for $265,000.

But most homes in the price range I'm looking for need work. So my question is, should I buy a new house or should I move into an existing house that needs renovation?

I am old and want to leave something for my children. But I'm afraid of my progress.

mark

You feel anxious and depressed

" The Big Step " is a MarketWatch column that explores the real estate scene, from finding a new home to applying for a mortgage.

Have questions about buying or selling a home? Wondering where your next step should be? Email Aarti Swaminathan at TheBigMove@marketwatch.com .

Dear and desperate

I am sorry for your losses. I hope you get the help you need during this difficult time.

Regarding your question, do the math and see what makes the most economic sense. Including maintenance and repairs, the total cost is less than the cost of new construction plus ongoing maintenance.

First, a note. if you list your home for $265,000, you may not get that price given today's high mortgage rates and the growing number of unsuspecting buyers in that market. So lower your expectations.

So, let's say you can easily afford an existing $250,000 home, with future renovation/renovation costs in mind.

Remember that mortgage rates are quite high, which puts a strain on your budget. But you're considering a VA loan, and here's the benefit. This can be a big plus for your customer. AT HOME

With foreclosure, the buyer becomes the owner of the home and also receives a mortgage from the seller. NerdWallet columnist Holden Lewis recently noted in MarketWatch, “Imagine trying to buy a house when mortgage rates are in double digits and interest rates are in single digits. This house may be free. If you can get credit, it can't be. be cheap with a double-digit interest rate.

So you're saying you want to move "somewhere warmer" in that price range? You also want a 3 bedroom ranch. What can you afford?

Given the inventory of homes on the market, there are several options available to you.

According to Zillow, you have fewer than 1,000 3-bedroom home options under $250,000.

Consider: According to the latest study from Houzz Home Improvement, homeowners will spend $18,000 on home improvement projects in 2021. You may need more or less depending on the condition of the house. Put it in your budget.

In most cases, yes, new construction means less maintenance and repair work. But in general they are more expensive.

“Foreclosures and other incentives builders can offer can make buying a new home more affordable. But finding a home is hard work,” Nicole Bachuad, senior economist at Zillow, told MarketWatch.

“New homes tend to cost more, targeting the higher end of the market. Buyers looking for starter homes will struggle to find a new building offer that fits their budget,” Bachuad added.

Budget and take into account the price of the home you want to buy, the potential mortgage rate, taxes and fees, etc., and get home renovation estimates or quotes in your price range. Then visit the new building and see what it has to offer so that the price of the new home matches your price range. See which is cheaper.

Sometimes developers may work with you to see what fixes might work. During my visit to a new construction site in San Jose, California a few weeks ago, I learned that one of the workers was suggesting that the (future) owner find a roommate for a short time to make the house more affordable.

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