- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Home Addition Financial Question
Posted on 4/17/18 at 9:41 am
Posted on 4/17/18 at 9:41 am
I have a new house (2) years old with a 30 yr mortgage. We have a decent rate at 3.75%.
If we want to add onto the house and finish out some SF above the garage and spend lets say 75k, is there a way to do this without refinancing? I don't want to take any equity out of the house we already have witch is roughly 24%. I could easily put up 20% on the addition plus some.
If I refinanced I'm assuming my rate would go up, is it possible to have a separate loan at a different rate?
I'm looking for some overall help or some questions I need to ask the bank, trying to get my head rapped around the financial part of it.
Yes I know its crazy to be adding on to a new house (2) years after being built, but things have changed since the design process, both financially and family size wise.
If we want to add onto the house and finish out some SF above the garage and spend lets say 75k, is there a way to do this without refinancing? I don't want to take any equity out of the house we already have witch is roughly 24%. I could easily put up 20% on the addition plus some.
If I refinanced I'm assuming my rate would go up, is it possible to have a separate loan at a different rate?
I'm looking for some overall help or some questions I need to ask the bank, trying to get my head rapped around the financial part of it.
Yes I know its crazy to be adding on to a new house (2) years after being built, but things have changed since the design process, both financially and family size wise.
3
Posted on 4/17/18 at 11:53 am to HamCandy
Interested to see your responses. I'm looking at finishing out a room over our garage as well to the tune of $25k. Need to also replace our aging roof and thinking about how to lump them together (our roof would run about $9.5-11k). As of now, I'll likely just pay for most of the room in cash, but would like to not throw all of that at it at one time.
Also, what are we talking on resale value if we make that improvement? I just don't see a scenario where I get $25k back out of it.
Also, what are we talking on resale value if we make that improvement? I just don't see a scenario where I get $25k back out of it.
Posted on 4/17/18 at 1:10 pm to HamCandy
I just opened a HELOC and the rate right now is 5%....that rate will fluctuate with the market.
House appraised for 360,000.
Payoff on house is 276,000.
They gave us a line of credit up to 89% of value, so...
360,000 x 89% = 320,400
320,400 - 276,000 = 44,400 available to us to spend however we please. Have to pay AT LEAST the interest every month. Period is 10 years from date of inception. So...if I were to use 20,000 in 5 years, I've only got the 5 additional years to pay that back. Full balance is due at the expiration of the initial 10 years.
We are also planning right now to finish a bonus room/5th bedroom. I have no idea how much it will cost, but we aren't in a huge hurry, and we are planning on doing a lot on our own and not using the line of credit.
House appraised for 360,000.
Payoff on house is 276,000.
They gave us a line of credit up to 89% of value, so...
360,000 x 89% = 320,400
320,400 - 276,000 = 44,400 available to us to spend however we please. Have to pay AT LEAST the interest every month. Period is 10 years from date of inception. So...if I were to use 20,000 in 5 years, I've only got the 5 additional years to pay that back. Full balance is due at the expiration of the initial 10 years.
We are also planning right now to finish a bonus room/5th bedroom. I have no idea how much it will cost, but we aren't in a huge hurry, and we are planning on doing a lot on our own and not using the line of credit.
This post was edited on 4/17/18 at 1:12 pm
Posted on 4/17/18 at 1:16 pm to AUjim
quote:
Have to pay AT LEAST the interest every month.
Do you pay the interest on the entire amount or do they distinguish your total allowable credit from what you actually used?
Posted on 4/17/18 at 1:25 pm to seawolf06
Just what I've drawn...I'm not exactly sure how that is calculated...I think it would be as if that current balance was amortized over the full remaining term at the current interest rate.
My current balance is $750 and our interest only payment was under $5.00.
Even though 90% of the folks reading this probably already know this, but used incorrectly, these things can have some pretty awful consequences, like potentially losing your house if you can't pay off that amount at the end. We got it strictly to be prepared to pounce quickly on investment property if the right one came along, with the intention of immediately refinancing and paying off our HELOC...
My current balance is $750 and our interest only payment was under $5.00.
Even though 90% of the folks reading this probably already know this, but used incorrectly, these things can have some pretty awful consequences, like potentially losing your house if you can't pay off that amount at the end. We got it strictly to be prepared to pounce quickly on investment property if the right one came along, with the intention of immediately refinancing and paying off our HELOC...
Posted on 4/17/18 at 2:17 pm to AUjim
Not thrilled with the idea of a HELOC.
Posted on 4/17/18 at 4:20 pm to AUjim
quote:
I just opened a HELOC and the rate right now is 5%....that rate will fluctuate with the market.
quote:
They gave us a line of credit up to 89% of value, so...
What Bank?
Posted on 4/17/18 at 5:54 pm to Golfer
Renasant
Posted on 4/17/18 at 11:43 pm to AUjim
I’m looking at doing the same thing right now- looks like we can do a HELOC until the work is done, then refi with the new square footage at a better rate. Our mortgage is currently 2.875% (7/1 ARM, 6 years into the ARM), so we want to refinance soon anyway. We’ll get the HELOC to do the work, then refinance the whole note. It won’t make that much difference in the note, but it will make us reset our loan term to 30 years again, which sucks but we’re not going anywhere any time soon, so we’ll need more work in another 5-10 years, so we’ll repeat the process. The way I see it is that if you’re in your ‘forever home’ you’re going to have to take some money out to renovate every 10-15 years, and if you get to reap the benefits of the fruits of your labor, then it’s not the worst ever to improve the house you’re going to love in for the long term, even if the Dollars and cents fon’t Add up, it’s worth it because it’s the place you live, and you want what you want for your house.
Posted on 4/18/18 at 5:05 am to LSUGUMBO
No offense but that doesn’t really make sense to borrow against your equity every 10-15 years. That’s an eternity...if you will really be renovating that frequently, that’s plenty of time to save cash.
Posted on 4/18/18 at 7:52 am to LSUGUMBO
I hear ya....that just wouldn't work for us. Our home is a huge part of our overall long term financial plan. We did a ton of homework to work with a great builder to get a great house in a great location for a great price and with a great rate. At retirement time the house will be paid off, and depending upon values at that time, and what our kids are doing, we'll have the flexibility to relocate and/or downsize if we so choose.
Posted on 4/18/18 at 10:29 am to LSUGUMBO
quote:
even if the Dollars and cents fon’t Add up, it’s worth it because it’s the place you live, and you want what you want for your house.
Definitely not my philosophy. Your house keeps the rain off of your head--it's not the thing that allows you to have a good life. Way too many people get their identity and their house intertwined, and they overspend, or over-improve, or otherwise make terrible financial decisions because of an emotional connection with a house.
For many people, a too-big house can become a burden in fewer years than the average mortgage (kids are off to college in 18 yrs). I'm a fan of just-enough, and no fan at all of the home theaters, elaborate outside kitchens, huge poolscapes, and other maintenance & energy-intensive extras.
There's no way in hell anyone "needs" to renovate every 10-15 years (not talking maintenance). Buy once, cry once: use quality materials and classic styles, and you won't be wasting cash on re-dos.
Would rather take a nice, long vacation than re-do the garage shelves & flooring (just an example of a silly home improvement).
Posted on 4/18/18 at 1:00 pm to HamCandy
Your only choice is a HELOC if you don't want to refinance your first mortgage. My bank has a remodel product, basically we take your plans and build cost get the house appraised. We loan you up to 80% of that LTV minus what you owe currently on your house. 30yr fixed right now is 4.5ish some days 4.375% .
Posted on 4/18/18 at 4:14 pm to hungryone
i have the same thought pattern. I am glad 80% of homeowners don't otherwise i would be out of business as a loan officer. Ask a person where the live and 90% will say the name of the subdivision they live in . Like your supposed to be impressed!
Posted on 4/20/18 at 1:55 pm to hawkeye007
Does a 2300 hundred a quater sound to high to you....
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News