Housing upgrade: addition vs new house

MagickalNarwhal

After we had our surprise 2nd kid in June, my MIL offered us some money to buy a bigger house (we currently have 2 adults, 2 kids and 2 dogs in a small house - 850 sq ft on the main floor, plus an unpermitted finished room and bathroom in the 500 sq ft basement). We are ok in this house now, and LOVE our neighborhood, house, local school etc. But more space would be awesome.

We have been waffling between adding 600sq ft (new bedroom, bathroom and dining room/play area) or buying a new house in this neighborhood.

Pros for the addition: we love this house and neighborhood, we could get exactly what we want, our mortgage rate is very low (3.75), not having to deal with moving, we would end up with more main floor space than we could get in a new house. Cons are dealing with an addition, which contractors have quoted between 2.5 and 4.5 months to do. More unknowns in the construction process.

Pros of a new house: not having to deal with construction. Might get a garage? Reaching here... Mostly it would just be avoiding the construction process. Cons: having to move, would prob end up with less overall space, mortgage rates are higher. Also now that I am mostly a SAHM I'm not even sure we would qualify for a mortgage so we would probably have to make some sort of cosignor arrangement with MIL which I don't love (just because I generally think that's a bad idea).

tl;dr if you had the choice between doing an addition to your house and buying a new one which would you pick? I just need to talk it out!!

MagickalNarwhal

If we did the addition we would move into a sublet for a month or two FYI

Also costs are just about equal.

olp920

Addition all the way. You can add the exact master bedroom/ bath/ closet you desire. I also wouldn't risk leaving the neighborhood if you love it so much. It's a few months of hassle, but moving can be just as bad or worse

LadyXaverian

In your case, since you love where you are, I'd probably go the addition route. We're in a similar situation (kid, 3 dogs, less than 100 sq feet), but we don't like our neighborhood, so we're going to sell/buy.

MagickalNarwhal

olp920 said:

Addition all the way. You can add the exact master bedroom/ bath/ closet you desire. I also wouldn't risk leaving the neighborhood if you love it so much. It's a few months of hassle, but moving can be just as bad or worse

Forgot to mention that we would only consider another house in this neighborhood, and right now they are selling FAST. In the past 6 mo, 4 houses that could have worked have gone on the market, and all had accepted offers less than a week after going on the market. So it might be a while before we could find the perfect house.

DreadLoc

A few months of hassle is worth several years (or a lifetime) of happiness.  Addition ftw.

MagickalNarwhal

Well in a crazy turn of events, our best friends put an offer in on the house ACROSS THE STREET. It was a total longshot - under asking price with contingencies in a market where things go for over asking price and are pending in a day or two...the putting in the offer motivated me to rethink the conundrum because it was clear it wouldn't be accepted.

It was!! So, we are DEFINITELY doing the addition!