2 mortgages, remodeling, need more cash

GoJennyGoJune 10, 2006

Hello,

We are in the midst of remodeling and need about 30,000 more. House value is about 430,000. First mortgage is 47,000 (15 yr @6.25 - 7 yrs. remaining) Second mortgage which we took out in Feb. is 120,000 (15 yr @6.25) We thought we took enough out in Feb., even allowed ourselves a 20,000 cushion, but surprise! - all new a/c and ductwork ate that up.

I would appreciate any advice on what we should do - consolidate? get a HEC line of credit for 80,000 and pay of the first mortgage? (which my lender suggested)

This experience has beome overwhelming! Ignorant and naive, we decided to live in the house while the work was being done. (to save money) Now in addition to living in insane conditions, we are stressed about running out of dough!

Thanks in advance for any financial advice - my brain hurts from decision making! Sincerely, Jenny

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blake2502

Oh my gosh, I could have written your post. I am in the exact same situation! I also need about $30k more and have so regretted trying to live in my house during renovation. Ugh, it's awful!!
Have been looking at the ideas of:
a) new home equity loan or line of credit
b) putting last bit on credit card with the hope of paying off in a year
c) taking private loan for $30k
I think the new home loan is wisest, despite cost to refinance, due to tax deductions. Would appreciate any thoughts on this too!

    Bookmark   June 12, 2006 at 1:06PM
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mariend

STOP, evulate what your debts are, go to a Bank or Credit Company, not mortgage co, and discuss this with them. You really do not want a 3rd loan. Just take the information home, discuss it, and take a deep breath and look where you can cut back. Go to the library and look for books/magazines on money, Like the gal who has information on TV about saving money. We have been there and and wish we too had cut back instead of just borrowing more. Is there a financial counslour avaiable that can help? Even certain law firms have people avaiable. Ask questions, read articles, but don't start buying books. If you have high % credit cards, and have good credit, ask them to lower the rates, I did and they did lower it 4 points.

    Bookmark   June 12, 2006 at 5:53PM
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joyfulguy

If you know of a Credit Union somewhere in your area, they are often very helpful in regard to various money management issues, including mortgages.

A credit union is like a bank owned by its users, sort of a peoples' "bank" - but legislation won't allow them to use that term.

ole joyful

    Bookmark   June 12, 2006 at 6:46PM
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chelone

We moved into our home when it was framed, plumbed, wired, sheetrocked. I well remember the chaos that you now see all around you. We shovelled in dinner, and we worked until 9PM, after a full day for pay. Days off and "vacations" found us hard at work on our love nest... doing the projects that required more than a few hours each night. It was hard work. (still is!)

I remember how excited I was when I FINALLY finished priming and sanding the walls and could finally put the color on them I wanted. Then, how exciting it was to see the plywood subfloor painted... and the window and door casing and the mopboards... (I painted all that, too).

I don't have any financial advice to offer. When we needed more money we got another job or picked up another shift. Or we saved for what we wanted to do. Or we cut back somewhere else. Maybe you could find a way to save some dough with "sweat equity"... or maybe that's not your "cup of tea". People thought we were NUTS to live the way we did. But we now enjoy 100% equity and the inconvenience seems trivial in hindsight.

Anyway, I understand how hard it is to live in a construction zone... I did it for 4-5 years and we still aren't done, although the major inconvenience is long since gone. Hang in there.

    Bookmark   June 13, 2006 at 3:41PM
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GoJennyGo

Thank you all for responding! It is comforting to read others words of wisdom, especially from those who have experienced remodeling themselves. I do not intend to take a 3rd loan, but we do need to come up with more cash to finish what was started. We are just kicking ourselves for not taking more in February at the beginning!
Thanks again, and since we haven't decided anything yet, please keep any advice coming!!!
Jenny

    Bookmark   June 14, 2006 at 7:22PM
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