financing home improvements for new home purchase? Roll in mortgage, heloc. hel?

[Anonymous]

Plus the taxes on investment earnings..

I would SO love to be mortgage free.

[Anonymous]

We've been looking at houses, and this discussion confirms a suspicion I've had. There has always been a premium on houses that are perfectly "done" and need no improvements, but there really seems to be one now. Houses that are "move in ready" seem to sell in days, while houses that need any work at all just sit, no matter what the price. I had the suspicion that it was because, while you'll pay more for the perfect house, it will all be a relatively low-interest, deductible home loan. If you need to do the work yourself, you're likely to need to be able to pay with cash or use high-interest consumer loans. With our current house, we re-fi'ed a two years after buying, paid off our second, and took out $50,000 for renovations. Those days are clearly over. This does tell me that, if we have the cash to do the work, we might be able to get a good deal on a fixer-upper.

[Anonymous]

Anonymous wrote:We've been looking at houses, and this discussion confirms a suspicion I've had. There has always been a premium on houses that are perfectly "done" and need no improvements, but there really seems to be one now. Houses that are "move in ready" seem to sell in days, while houses that need any work at all just sit, no matter what the price. I had the suspicion that it was because, while you'll pay more for the perfect house, it will all be a relatively low-interest, deductible home loan. If you need to do the work yourself, you're likely to need to be able to pay with cash or use high-interest consumer loans. With our current house, we re-fi'ed a two years after buying, paid off our second, and took out $50,000 for renovations. Those days are clearly over. This does tell me that, if we have the cash to do the work, we might be able to get a good deal on a fixer-upper.

This is right. We can comfortably afford a 20% downpayment and mortgage on a house priced up to $900K. But if we bought a $700K house we wouldn't be able to do even $200K of renovations. After funding college savings, retirement, etc., it would take us several years to be able to do something like a kitchen. So we are looking at more "done" houses in the $800-900K range. It sucks because in many cases we would have done the work exactly to our tastes and probably spent less than the price of a house somebody else renovated.