You and the kids are standing in line for the bathroom. Then you're elbowing each other in the kitchen. Togetherness is one thing, but when your family starts competing for the same space, it might be time to add on to your home or to remodel the space you already have.

The decision to add on or remodel depends on several factors. Your budget, your home's condition and the age of your children are common considerations when adding square footage or transforming underused space into a playroom, office or spare bedroom. Regardless of which route you choose, the end result should be the same–creating a more livable environment for your family. Here are some things to talk about with a contractor.

ADD ON A DREAM ROOM Look at your home realistically. What kind of addition would complement the design of your home? Can you bump out into the backyard or should you add another story? Does an addition enhance your home's value? And would you get back your investment if you resold your home? The size and location of your lot also are worth considering. For example, if yours is small or sloping a second-level addition may be the only option available to you.

REDEFINE UNDERUSED SPACE If adding on is too expensive you may be able to claim underused space and reconfigure it for better functionality. For example, a screened-in porch could be converted to a four-season room with the addition of weatherproofing and new windows. Or use the space beneath a stairway to tuck in an office or reading nook.

HOW BIG ARE THOSE KIDS? Think about the size of your family (and the size of your children) when you start drawing up plans for a change. What are your family's long-term needs? If you have small children, they will grow and eventually outgrow small or shared bedrooms. Keeping the bedrooms as they are but adding a playroom for overflow may be the best option. And although your college-bound teens may feel cramped, a simple remodeling job (for example, carving out space for their computer or entertainment center) might get them happily through a couple of years.

WALK THIS WAY One way to determine what type of floorplan change is needed is to watch how people move through your home. Do guests have to traipse through family areas to use the powder room? Does entering through the back door mean having to cut through the kitchen? Changing your home's flow may unsnarl traffic jams. That could consist of something as simple as making a new entryway or removing an island.

FINANCING AN ADDITION A home equity line of credit is a flexible way to borrow against the equity in your home. Once you open up a home equity line with your lender (in a process similar to applying for a mortgage, only less involved), you can borrow from it (up to a set amount) when you decide you need to, and you'll only pay interest on the money you borrow. As long as you don't borrow anything, you won't owe any interest. Contact your local bank or credit union for current rates.