Home Improvement

[UncleJoseph]

So for the last 4 years I've been remodeling my 101-year-old home. On the first floor, I removed 2 walls drywalled the ceiling (because the plaster was falling down), re-wired several parts of the entire house, built a back deck, re-wired the garage, re-roofed the garage, built new steps for the front porch, installed a 1/2 bath on the first floor, repaired the floor throughout the first floor, landscaped the yard, installed new windows on the second floor and some on the first floor, installed laminate flooring on in the dining room, fixed numerous plumbing problems and a few other minor repairs. I'd say that if I sold the house and used the equity to pay off debt, I'd have about $20k left over, if I get a reasonable price for my house.

In doing all these repairs, I've used a lot of my credit capabilities. I still have several major things to do. I have to finish the remodel on the 1st floor 1/2 bath, living room and office. The primarily requires prepping and painting the walls and trim, installing carpeting, and a little more trim work. I also have to repair a big foundation leak, and the roof (including the trusses/rafters) needs to be completely replaced. Due to the repairs/upgrades, I have almost doubled the value of my home in the last 5 years. However, I've almost eaten up that equity in debt for the repairs/remodel.

Now, I'm in no danger of having my credit rating go down, and I still have excellent credit and borrowing power. However, I'm considering a refinance to wipe out everything but the mortgage payment. On the other hand, I'm also planning on moving in the next year (by July 2008). I'm worried that the relatively high credit debt due to the repairs will leave a black mark on my potential new mortgage in the next year.

Any recommendations? Should I refinance (and risk paying lots of mortgage fees/closing costs twice in the next year)? Or stick with the credit debt?

[sinsual]

Have you had the house appraised within the last 6 months to verify how much the house value has gone up? I only ask this because of how we were affected when the wife refinanced. In our case, we expected the house value to be one amount, but after the appraisal, the value was another $50K higher. This not only got her a much lower interest rate (8% difference) it changed the amount of her equity line through the bank. Through negotiation, she kept her equity line amount the same, but got the bank to swallow all of the fees associated with the refinance. Having the fees gone, and the value of the house being more then planned, we looked into the possibility of moving, using the equity of the house to get into a better situated location since the value would put us in the bottom end of the spectrum for a more centrally located, yet not in downtown area. We have since changed our mind and now, like you, we are doing home improvements, though ours are to keep the value where it's at. Living in an HOA, we have the advantage of the higher values, but we know that we can't raise the value much over what it's already at. Our other issue with our area is that it's is being used by the original contractor as a hold over/stepping off location for families that have bought into a much higher value division that is being built 5 miles from here. He is leasing out homes that fit our floor plan to those families until their new homes are finished. The effect is that our house value hasn't gone up as much as some of the other floor plans. Once the new division is finished, and the contractor sells those leased models, we should, according to the appraisal, gain upwards of another $25K in value. I know this has been long winded, but my point was how the appraisal affected our decision as to what to do. We are holding out to see just how much the value increases. We have a mortgage that is working well for our budget, being able to get home improvements done on a slow scale because we have the time, and still having fun on the side because we can afford it. So when we move, we will be in a stronger position to move where we want.