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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Hi- I'm the OP. Here are more details-
Our kids are very young (newborn and early preschool and I was not a high earner before we got married). I would likely be working to pay daycare costs.

We are in a $900k fixer uper. We bought it in 2008 knowing that over the years we could grow into it and make it ours. It's the smallest and least updated home on our street.

Renos would include bumping out our kitchen, moving the laundry room upstairs and carving out a spot, reworking the mudroom. I picked $100k as an amount but it could prob be done for $80k. I'm not looking for high end finishes. Just trying to make the space functional for our family.

The contractor we met with said that most people take loans for this type of work. DH seemed ok with that at first but then got cold feet.

I'm confident that we could afford $1500 a month for a loan payment. However, to save up $100k would take quite awhile. I want to enjoy the space now, when my kids are young and we truly need it. [/quote]

That is a really bad idea. I don't understand why you didn't take that $900,000 and buy a cheaper house and use some for renovations or buy a done house.  $1500 is a huge chunk of money when you are not used to having a mortgage.  I would open a separate bank account and put $1500 a month a way and start saving.  [b]We do not take out loans for home repairs[/b].  Cash or it doesn't get done.  We try to do one project a year if big or several smaller ones.  I don't see how much more "space" you need if you are in a house at that price range.  Or, sell, and move to an area that will give you a bigger house.  If you are ding all that, you will also have to move out and rent for a while.[/quote]

But do you have a mortgage?

I have been posting, but I assumed OP inherited the house, not that OP inherited money and then bought the house.  I agree that a better solution would have been to buy a cheaper house and use the cash to renovate.

But perhaps that wasn't possible because they wanted a specific location, for whatever reason (husband's commute, schools).  I don't know.

But if they don't have a mortgage, I don't see a problem with taking out an amount that is significantly below the value of the house and that is within their budget to pay off in order to get some necessary renovations done.

I'm not so sure, after reading OP's follow up, how necessary her renovations are.  If the house truly does not have a layout that is functional for her family, then sure.

As an aside, I don't think "bumping out" a kitchen is necessarily a good idea.  I would also add that renovations that alter the square footage of the house will have some tax implications.

Some renovations don't have as severe tax consequences.

I also suspect what OP is talking about -- including the bump out -- is NOT going to come in below 100k.  Partly it depends on where OP is located, but a bump out could be expensive, not just to do but with permitting.  [/quote]

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