Remodel//Construction Loan...worried

robinson622November 6, 2010

We are in the middle of a remodel/addition that has been a nightmare...think Holmes on Holmes. Thank goodness he didn't get far with the building before we stopped him, so the house is built very well. The problem is we had a construction loan for 160k first GC got 20k of the loan. When new builder came in his price was 180k to finish house to completion. We had 140k left in the loan.

My questions are:

Should I see if the bank will give us the 40k we'll need to finish?

Should I take out a pension loan?

Should I use a credit card, and then consolidate debt at our closing? We have little credit card debt, and I don't want to get into that.

There's always family, but I don't like owing money to family members.

What are our options?

We are both teachers, my husband 18 yrs. and myself 15 yrs., so our jobs are secure.

We have a claim against first builder's insurance company which would help, but we can't count on that money.

I just need to know that I can finish this house. We can afford the home, it's just that the appraisals are going to kill us, I know. So I need to know where would be the best place to get the money.

Thanks for your help!

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maifleur01

I would look at what you planned on doing and discuss with contractor any easy reductions that could be made in the contractors estimate. Perhaps things that you could finish or the bid could be split into two parts to cover now and later. Most contractors do not like to do this because most never go back and do the second part.

The next question are all of the remodeling necessary or just wish list remodeling?

In this area some school districts have fired all of the teachers. The teachers then have to reapply for their jobs. Many of the higher paid ones have been left with no contract even with the teacher's unions.

You do not state how many contractors you have bids from but never stop with just one unless that one is the only one in your area.

Other than asking the bank for additional money the rest of what you are considering are in my mind really bad ideas.

    Bookmark   November 6, 2010 at 10:14PM
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robinson622

Well after really looking over things last night, we are in need of about 25k. We already discussed doing what we can on our own with our GC, and he understands.

The remodeling became necessary when first builder took my roof off and never came back to finish the work leaving a tarp on our home through the horrible winter that we had. So what was supposed to be left alone couldn't be, and ended up being a whole house remodel after all of the precipitation entered our home. Fast forward to today, we are at the drywall stage and nearing the end of our project.

Wow! All of the teachers were fired. Why? That's horrible. We are the only elementary school in the district and the largest elem. school in NJ. This is the only public school the children in our township can go to. We have one middle school also, they are just very large. I do not take it for granted and anything can happen...we've learned that the hard way.

I bidded the job to 6 general contractors and chose this one based on recommendation and workmanship. He has been extremely understanding through this whole matter.

I guess this will be figured out in the next couple of weeks. It sounds like borrowing from the bank is best. Let's hope they let me borrow it.

    Bookmark   November 7, 2010 at 10:28AM
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