How do home improvement loans work?

[Moxie]

Here's my (long) tale of woe.

 

We bought this house 5 years ago. It is in a great location and I like the neighbors but I hate hate hate the house. We bought it for the location and because it is big and was $50-100k cheaper than the houses around it. We bought it knowing that it would be a 10 year project updating it and fixing broken stuff. The plan (bwahahaha) was to do the work slowly, with cash, doing the work ourselves.

 

In reality, nothing is getting done and won't any time soon. DH is super busy and, turns out, hates diy projects. The IKEA kitchen we were going to put in is a laughable memory. There is just no way he will tackle that.

 

Our options are 1. move (tempting as this place also has an occasional flooding issue we can't fix) 2. live with this falling apart, hideous house 3. pay someone to fix it up. We don't have the cash for that. How do home improvement loans work? Given that I have kids starting college in 2 years, should I just suck it up, save money and live in this fugly house?

[LucyStoner]

I would be tempted to move if feasible based on the flooding issues alone.

 

If there weren't flooding issues I would suggest you personally take up home improvement projects as your new hobby now that the kids are in school.

 

You could get some estimates of what it will cost to pay someone for anything you can't do and start tallying up how much of a loan you'd need for home improvements.

[Scarlett]

Here's my (long) tale of woe.

 

We bought this house 5 years ago. It is in a great location and I like the neighbors but I hate hate hate the house. We bought it for the location and because it is big and was $50-100k cheaper than the houses around it. We bought it knowing that it would be a 10 year project updating it and fixing broken stuff. The plan (bwahahaha) was to do the work slowly, with cash, doing the work ourselves.

 

In reality, nothing is getting done and won't any time soon. DH is super busy and, turns out, hates diy projects. The IKEA kitchen we were going to put in is a laughable memory. There is just no way he will tackle that.

 

Our options are 1. move (tempting as this place also has an occasional flooding issue we can't fix) 2. live with this falling apart, hideous house 3. pay someone to fix it up. We don't have the cash for that. How do home improvement loans work? Given that I have kids starting college in 2 years, should I just suck it up, save money and live in this fugly house?

 

 

Welcome to my world.  5 years ago it seemed like a good idea.  I am still not sorry we did it but it is never going to get finished with cash flow.  So we are either going to 1)borrow money to fix it up and then sell. or 2) sell as is.  Either way we want to move into town with less yard etc. 

 

I feel your pain.

[Scarlett]

I'm curious about loans, too. We also bought for location, but our situation is a little different, in that we do actually love this house. But there are some things we'd like to improve to make it more livable for us. The biggest thing is that we'd like to add a den off the back. We'd probably have to have a loan for that. I don't know how those loans work though.

 

 

You can get a HELOC or you can get a Second Mortgage or refinance the entire mortgage into one.  Depends on your equity and also on how much you expect to need to make improvements.

[Guest]

The issue with selling is that we'll probably need to do most of the things on our list anyway to make it marketable. So, tempting but not really a solution.

[Χά�ων]

I would be tempted to move if feasible based on the flooding issues alone.

 

If there weren't flooding issues I would suggest you personally take up home improvement projects as your new hobby now that the kids are in school.

 

You could get some estimates of what it will cost to pay someone for anything you can't do and start tallying up how much of a loan you'd need for home improvements.

This. Though I would have to investigate the cause of the flooding issue and determin if something simple, like a sump pump, would solve it before I seriously looked at moving.

[Carol in Cal.]

Maybe you should talk to a realtor about what you would like before you decide, and see what she thinks you could get for your house and what you could buy elsewhere.  You had good reasons to want this house in the first place, and they might be more or less valid after 5 years.

 

The flooding is serious, and at least in my state it would have to be disclosed.  I wonder whether that would make it impossible to sell without fixing it?  

 

Re. doing it yourself, personally I hate that kind of thing, but then, I grew up in a house that was unfinished when we moved (I was 5) and still not done when I moved out (at 20), so I'm a poster child for 'never again!'  I've known people who grew to really enjoy doing their own improvements, and really going after it.  Are we talking mostly paint and light fixtures?  Or big things like moving walls and changing windows out?  Maybe if you gave us a list, we could help you prioritize.

 

Forget the Ikea kitchen for now.  Pick one room that is easier to imagine finishing fairly quickly and really enjoying when it's done.  And just design that one.  Then see how you feel.  Sometimes having a refuge in an undesirable house is all the respite you need to feel motivated to jump onto everything else.  Sounds like it's more on you than on your DH, but looking at the bright side, you can make all the design decisions that way.

[maize]

We are currently doing some home improvement projects using a home equity line of credit--you apply for a loan based on equity in your home; it works a bit like a credit card (but with MUCH lower rates and usually tax deductable) you have a credit limit but only take out the $ amount you need at a given time. Typically you have a certain number of years (say, 5 or 10) during which you can withdraw funds and are only required to pay interest (but no penalty for paying down principal) followed by a repayment period with amortized principal/interest payments like a regular mortgage.

 

We've used a HELOC before and payed it off quickly.

[Guest]

We've done all we can, paint, some new floors, etc.

The house has only been updated badly since the 70's.

The kitchen needs gutted (I've painted the cabinets but they are broken, the stove top is super old, the gross colored laminate counters are destroyed).

Both big bathrooms are all tile. Like, all 4 walls. Some of the tiles have been replaced by tiles that aren't the same color. The master shower leaked through the wall from the upstairs to the basement for 10 years before we bought it (long story). They knew something was leaking into the wall for 10 years and seemingly did nothing. Anyway, that wall needs to get replaced from the upstairs shower down through the first floor and into the basement.

The windows are the original wood windows and need replaced.

Not even touching the yard flooding issue which we've already spent a couple thousand trying to fix.

I wish I could get a do-over but I can't.

[Scarlett]

The issue with selling is that we'll probably need to do most of the things on our list anyway to make it marketable. So, tempting but not really a solution.

 

 

This is the issue we have too.  :)  We are going to have a realtor out soon to tell us what it is worth as is.

[Scarlett]

We've done all we can, paint, some new floors, etc.

The house has only been updated badly since the 70's.

The kitchen needs gutted (I've painted the cabinets but they are broken, the stove top is super old, the gross colored laminate counters are destroyed).

Both big bathrooms are all tile. Like, all 4 walls. Some of the tiles have been replaced by tiles that aren't the same color. The master shower leaked through the wall from the upstairs to the basement for 10 years before we bought it (long story). They knew something was leaking into the wall for 10 years and seemingly did nothing. Anyway, that wall needs to get replaced from the upstairs shower down through the first floor and into the basement.

The windows are the original wood windows and need replaced.

Not even touching the yard flooding issue which we've already spent a couple thousand trying to fix.

I wish I could get a do-over but I can't.

 

 

Well I would not do anything until I fixed the water/flooding issue.  You need someone who will be honest with you about the drainage system and do proper grading.  If my husband were near you he would tell you...that is his speciality in engineering....hydrology.

[Guest]

Well I would not do anything until I fixed the water/flooding issue. You need someone who will be honest with you about the drainage system and do proper grading. If my husband were near you he would tell you...that is his speciality in engineering....hydrology.

We've had lots of specialists work on it and we've spent too much money on it already. I could type up a long explanation but it is as good as it can get. It doesn't flood the house, just the yard and garage. It sucks.

[Scarlett]

We've had lots of specialists work on it and we've spent too much money on it already. I could type up a long explanation but it is as good as it can get. It doesn't flood the house, just the yard and garage. It sucks.

 

 

Oh I see.  Well, I know how exhausting it gets trying to fix a fixer with no time and/or no cash.  I am just about done.  Thankfully we got a good enough deal I think we will still make money.

[MedicMom]

No advice, but it makes me feel better that I'm not the only one. DH was working a completely different job when we bought this house pre-kids, and the fixer upper was a brilliant idea. Then.

Now we're just stuck.