is it crazy to think about getting a home improve loan in today's economic climate?

[vash]

five years ago, i bought a house that i could afford. small, slightly run down, but good "bones". i slowly did some things. updated all the electrical the guy can reach, new copper waterlines, 75% of the windows changed over.

i had a mental goal to fix the house in five years. l like the hood, neighbors are great, schools are ghetto but i have 0.0kids, and my lot is huge for the bay area. i have steadily improved my paycheck the entire time. things are definately better pay wise.

i want new wood floors, finish the windows, remodel the BR, maybe add a second one, remodel kitchen, and get rid of all the lathe/plaster, add new shtrock, new doors throughout.. (what, maybe $100k?) just update the place..

with the housing downturn i can borrow alot less money. this is all very confusing to me. if i pack up and move, i would probably end up with a better house that still needs work.

cliff.

[BeyGon]

You might be able to get some deals on labor right now, I think materials are still going to be expensive but maybe labor. Unemployment is still only %6.1 but lots of builders looking for work.

[Eric Coffey]

If the house falls under FHA limits, you might look into a FHA 203-K rehab refinance.

[Macroni]

Cliff,

The amount you can borrow depends upon your equity position in the house and your ability to repay [Credit rating / compensation relative to monthly expenses]. If you can satisfy those requirements; go for it there are some very good rates available.

[onewhippedpuppy]

Cliff, don't you DIY some stuff? I've found it pretty easy to "pay as I go" while doing my own remodeling work. Working evenings and weekends I don't work fast enough to spend it that fast anyway.

[vash]

matt. i got busy at work. i also live in a small shack with one bathroom. i need to live at my mother in law's while this happens. i need it to happen FAST! i love the lady, i dont want that to change. she is way more typeA personalilty than i am. we would implode.
i dont mind DIYing a portion of the work. i could do doors, windows, etc.

[Zeke]

Well, you could hire a contractor to make the bathroom happen, but I'd follow the pay as you go advice. There's nothing like having a low payment and a lot of equity.

And, think about this, if you finish it up quickly, will you become restless and want to "move up?" I can't finish a house or car if I want to keep it

[imcarthur]

Originally Posted by milt

I can't finish a house or car if I want to keep it

Truer words have ne'er been spoken . . .

Ian

[cantdrv55]

Pay as you go and take your time. You've seen my place. We lived here through the remodel and it was hell for about three weeks. We are nowhere near done but I like not having a second mortgage on the house.

[Porsche-O-Phile]

Putting money into real estate right now is great if you take enjoyment in lighting piles of $100 bills on fire just for fun.

[Steve Viegas]

For me, the main point would be to make sure you were financially comfortable. Getting a HELOC or something similar would run you perhaps $600.00 per month for a $100K loan. Are you comfortable with that?

Recently (within the past 3 months) I have put a roof on my house, redone two bathrooms, landscaped the backyard, painted the exterior of the house and put in a new kitchen.

These were things I wanted done and while my financial situation is not where it was 5 years ago, the cost of doing these items made it worthwhile to me and my wife. Our finances were such that when all was said and done, we put about $15K on the HELOC and the rest of it we paid for out of pocket. We could have paid for it all out of pocket, but borrowing money these days is still cheap and the market is somewhat ugly so I wanted to give that money a chance to come back.

[cgarr]

Why not just get a LOC?