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Old 03-15-2005, 11:04 AM - Thread Starter
 
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We are planning to renovate our kitchen this summer. So far we have architects plans and getting cintractor bids now. We do plan to do some of the work ourselves but in the city we live only a contractor can pull a permit. My IL's gave us a chunk of money last year for this project, of course things happened and we don't have that $ any more. We still need to do the work since A- they gave us the $ and B- MIL broke her hip and part of this renovation is needed for to her to visit us. Anyway we are considering refinancing or home equity loan. Any suggestions about which way to go. We have refinanced several time and pulled out money. We have a low 5 something 30 rate now. Our mortgage however is only 200,000 on a now about 600,000 house.

Advice?
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Old 03-15-2005, 11:18 AM
 
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I think if you refi your rate will go up quite a bit. I've never had a HE loan, so I can't help with that. You may want to look into a like of credit which I think is bassically the same thing. It's a credit line that's secured by your home. If you're a responsible credit user, it's great because of the VERY high limit, so you can use it for major jobs like you're talking about. Also, it's always avaliable, so a few years down the roas when you decide you also want to remodle the bathrooms, or finish out the basement or whatever, you don't have the tons of paperwork to do again. If you're not good with credit cards, knowing you have $400000 "avaliable" dollars could be a problem.. Yuo don't want to loose your house b/c of a HSN (or diapering!) addiction. haha Hopefully someone who's had it all can help out more.
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Old 03-15-2005, 01:39 PM
 
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Home Equity Lines of Credit (HELOC) have variable interest rates, so they fluccuate a lot (and interest rates will rise). If you think you can pay off the HELOC in the near future, go for it! But if you need to pay that loan back over many years, you might compare interest rates on a Home Equity Loan and a refi where you take cash out at the end to pay for the work.

The point is NOT to get mortgaged to the hilt... We're in a similar situation, and decided on the refi with cash back because it's big job (we're building a barn for dh's business), and I didn't want to get stuck paying at future high interest rates with a HELOC.
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Old 03-15-2005, 02:19 PM - Thread Starter
 
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I should have been more clear in the op. we will be taking a LOOOONG time to pay this back. and we really can't afford more than maybe $100-200 a month in extra payments. It looks like I need to look at both a refi and a home equity loan

thanks
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Old 03-16-2005, 03:42 AM
 
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You can compare your options using the calculators at mtgprofessor.com Just plug in the values and the calculator will tell you what each will cost you in the long run.
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