Room additon-how to pay?

[mommyx4]

The title sounds silly, but I couldn't think of another title.

We'd like to put an addition on our home. We have about 1/4 of the $$ saved, but would like to do this before our next baby arrives(in April) and won't have the cash saved by then. We can't refinance because we don't have enough equity in the home to cash out. What are the options? We have excellent credit and no debt(except the mortgage).

 

 

*I'm not new on the boards...I just left for a long time and couldn't remember my username and password so I signed up again*

[elfgivas]

congrats on having no debt other than your mortgage! that is fabulous! do you remember how you did it? could you apply those same rules to this?

 

in our house, if we don't have the money we don't do it, regardless of how badly we want it done. it is so hard to wait, but not as hard as being in debt. if you don't have enough equity in the home to refinance, then that's a clue that waiting may be a good idea.

 

we are in the midst of having our windows replaced and new siding put on. since they started, they've discovered significant water damage, so now we need new plywood, too. so whatever number you think you need, i'd add at least 20 % for the unexpected things. (i suspect that's a low percentage, too)

 

fwiw,

ann

[elegantlion]

I would not undertake a room addition with only 5 months to go. Are you in an area where you get winter weather? If you plan on living in the house, I would not want to be around construction debris and dust in the latter part of a pregnancy. Also if winter weather is an issue, there could be delays. If they find damage there could be delays. Will construction noise be an issue if you need to rest? There would be too many variables to make me feel comfortable doing an addition, aside from the money.

 

As far as financing, I'm not sure.

[Tenaj]

We just built on a four-room addition but we had enough equity to get a home-equity line in order to cover it. It sounds from your post that isn't the case for you. Do you have a local brick and mortar bank or credit union that you work with? I'm wondering if they would consider something like a construction loan based upon the new estimated value of your home?

 

When we were facing this issue, my dh just went into the branch of the bank we almost always deal with and told them what we wanted to do and asked what the options were. Once you get a list of options, then you can shop the best deals.

 

Regarding the time factor that someone mentioned, the five months would probably be a bit short depending on what you're doing unless you don't care if it's completed by the time your new wee one arrives. We broke ground at the end of March and were able to move in the third week of September. One of the problems you'll probably face is that the last things done do create a lot of dust and smells (the drywall, the varnish, the carpet, the paint). I'm not sure you'll want to be dealing with that at the end of a pregnancy or with a tiny newborn. My youngest was 6 months when we started and a year when we finished. Our add-on was able to be isolated until the very last three weeks but then the tarp had to come down for the finish work and even that was hard to deal with.

[jar7709]

We built our current house while I was expecting my #2. It was sooo much stress, fumes, inconvenience, everything took longer than originally estimated (baby was born 1 week after we finally moved in) I don't want to do that way again. But that's more than a room addition, and you know your situation best.

 

That said, we did ours with a construction loan. That part of it I would do again, it went smoothly, and it rolled over into our mortgage. I'd look into that if you can.

[milovany]

Google "rural rehabilitation loan" and see if you qualify (it doesn't just mean "living in the country", it has to do with small towns in rural areas, too). It's a government program. There's an address search feature that tells you if your property qualifies. Really low interest rate. This is what we're planning on doing. It can only be used for certain things and it would qualify under making the house safer (enough bedrooms for the number of people living there is a safety issue, according to them).