financing

cathie2029

11 years ago

OK. I see that a lot of you are doing additions... Assuming all have enough equity for a HELOC? If not,how do you go about getting financing? We don't have debt aside from the mortgage and a car, and both payments combined is about a third of our monthly net income. Credit is excellent. Our main problem is that we bought in 08 so obviously we are right where the houses are selling now (We bought for significantly less than what they were selling for)=no equity. The addition is only $35K and calculating that over 8-10 years will not affect us.

How do you all do it? Is saving my only option right now? Thanks in advance...

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Comments (3)

kirkhall
11 years ago
-Personal loan? (the rate will be higher).
-Saving.

What is your interest rate. It might be possible to refinance (now or after the addition) into a lower interest rate and in so doing, lower your monthly mortgage amount allowing you to save more quickly.

If you can get a personal loan (and it is smart to do so--examine your own situation to see if that is really a smart thing to do or not); you can finance the addition with it; then refinance your house after the addition with the understanding that you probably won't have a boost in equity in the amount of your addition (it will likely be less). But, the additional square footage is worth something in an appraisal; unlike simple remodeling might be.
EngineerChic
11 years ago
We did a significant renovation (replaced the second floor) and we saved up the money for it. I'm not saying that's the only option, but I'm a whole lot more comfortable paying for this from savings than I would be if we had a loan for it.

How long do you think it would take you to save $35k?
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weedyacres
11 years ago
We cash flowed all our remodeling. I'm very debt averse. :-)