Need opinion on renovation loan

[03cobra#2]

So I inherited my mom's house along with my sister. It's paid off. I'll be buying her half out for around 80k.Have my current home I live in on the market to be sold, probably going to be close to break even. Plan is to renovate my mom's house and move into it. House is worth about 175-185 as it sits. Scope of the project is going to be around 125ish. I plan to take a loan out for the entire amount and have cash set aside for contingencies.

I have a general contractor picked out and have my first meeting with a architect on Tuesday to start plans.

So what would be the best loan? Home equity line, home equity loan, mortgage, fixed, adjustable? I have plenty of cash reserves, and make a good living that I can afford this no problem.

 

[KingBlack]

203k

 

[ford fanatic]

Last June we refinanced and used our equity to do some home renovations too. We also dropped our percentage rate from 5% to 4.25%. Same situation as you 125K, for our projects. New kitchen, 600 square foot addition and 3 car garage were the big ticket items, the rest was for furniture, floors, paint etc...

 

[97ReoCobra]

Sounds like Sis is getting shortchanged.
Type of loan depends on how long you plan on having it.

 

[oldmodman]

If you can get a fixed mortgage for the amount you need on a house you already own a share in do it.

You should be able to save at least two percent over a home equity line of credit. And all interest is fully deductible. Which depending on how the house is deeded might not be true on the equity loan.

 

[03cobra#2]

Well house will be deeded in my name, and I plan to live in the house at least 20 years.

 

[Screw-Rice]

Given the value as it sits, you have options. May be able to look into a home equity line of credit, or take a loan on it. 70% LTV will get you the money you are needing to reno. I've got a good broker if you want options you can bounce off him and see what he thinks.

 

[Equalbracket]

125k renovation? What in the world are you doing to it?

 

[04svtsnke]

Coming from someone starting to deal in real estate, you have a gold mine on your hand. Makes me sweaty thinking about the money you could make with both yours houses, especially since they're both paid off. Like others have said, the best would be to find a fixed loan because the interest will be cheaper.

 

[Screw-Rice]

125k renovation? What in the world are you doing to it?

That really isn't a lot depending on size of the house, and what they're doing. A full gut and reno can easily hit that figure.

 

[greenscobie86]

Coming from someone starting to deal in real estate, you have a gold mine on your hand. Makes me sweaty thinking about the money you could make with both yours houses, especially since they're both paid off. Like others have said, the best would be to find a fixed loan because the interest will be cheaper.

Can you expand your answer a bit? I'm interested to hear this.

 

[nxhappy]

I would just sell the house and not **** with it

 

[03cobra#2]

Let me back track a moment. The house I'm about to reno is paid off. The house I live in now is not. I'm not really upside down in it. I currently have it on the market....might have to lower the price as we have only had 5 walk throughs in 30 days....with one happening today.

For the house I want to renovate we are looking at opening up the floor plan, adding on, blowing out the kitchen to make it bigger, all new windows, doors, there's a lot to do. Going to be sweet when it's done. Had our first meeting with the architect and they are working on sketches.

Which means I gotta get going on my loan pretty soon.

 

[nxhappy]

we have only had 5 walk throughs in 30 days....with one happening today. .

You are priced way too high. You better sell it within the 45 day mark or you will have a REAL hard time selling it.

 

[ford fanatic]

125k renovation? What in the world are you doing to it?

We're at 100K on our reno, and still have about 40K to go...

It turns into a snowball effect real fast. A lot of it is that it doesn't make sense to upgrade one thing and not something else.