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12.30.2020 / Renovate/Build

Construction vs. Renovation

Renovate, Rebuild or New Construction: Consider It All

Whether you’re looking to build a custom home from the ground up or renovate an existing one, there’s nothing more fulfilling than having your home fit your personal style and needs. Gateway can guide you through the best financing options during this exciting process.

Here are some factors to consider:

  • Location: Is the new home construction site or your existing home in a neighborhood you want? Does the area have any zoning restrictions that would prevent you from creating the home you want?

  • Proportionate Renovations: Sometimes, homeowners want to put high-cost renovations into a home of lower value. Does this investment make economic sense?

  • Code Requirements: One risk of renovating your home is, dependent on the age of the home, you may be required to bring other parts of the home up to current building code. Will there be additional costs to consider (like plumbing, wiring, heating and cooling that will increase the need for financing)?

  • Plans to Stay in the Home: For a big renovation, you should consider staying in the home at least five to seven years to recoup your costs. If you are you in a smaller home, is your family growing?

  • Sound Foundation: If the home you plan on renovating is not structurally sound, this can significantly add to the needed repairs. Are there foundation problems with the house?

  • Water Damage: Minor water damage can often be fixed with a renovation. But when the water damage is extensive, you might be looking at a complete rebuild. Has the area been declared a disaster area? What is the cost difference between renovation and rebuilding?


Perhaps your biggest question when considering renovation versus new construction is the cost factor. Be sure to make a list of potential expenses for each possibility and compare.

Consider that major renovations often reveal at least a few other issues that need repairing. The final cost is almost always higher than you anticipate, so be sure to factor that into your final equation.

Bring in the proper professionals to help you estimate costs. Builders, structural engineers and architects can all provide you valuable insight into your decision, including into the local zoning and code requirements. And if you have a relationship with the Realtor who helped you buy the house, you might want to bounce your ideas off them too.

When you are ready to take that next discuss or get more of your questions answered, check out all of the Renovation and Construction options available or Find a Mortgage Center near you.

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