*renovation, not refinance

Just did a renovation in the spring. Budget was $275k, ended up at $325k. We had planned on doing a HELOC or Home equity loan, but there was a miscommunication between me/DH/GC and they started demo before I got the loan secured so that fell through.

So, we used cash, which we pulled from various sources - investments, crypto, our tax return, and the proceeds from the sale on a different home we owned. For a while I thought I might have to ask for a loan from family!

Now we have about $900k equity in our home. I don’t love having so much equity tied up, but our mortgage ($150k remaining) is at 2.25% so I don’t want to refinance.

But yeah, at the moment, we are pretty cash poor because of the refinance.

Cash - addition for twice that. Was expecting $250k - turns out it’s $500k (underestimated costs, and prices have gone up)

$350-400K was from cash savings from selling our old house (downpayment for the new one was from hoarding bonuses, inheritance and a lot of savings thanks to a ridiculously low mortgage). Rest was from investments - wanted to avoid that, but…

We are about to build an addition about twice that cost. We will look for the lowest interest rate between a liquidity access line and an equity loan (or do part in each product). We will also pay a good amount along the way from savings and cash flow. We plan to pay off loans over the next several years by liquidating stock holdings periodically + cash flow, rather than selling it off all at once. In essence, this is a bet on the stock market going up more than the interest rate of the loan, but because of some complicating factors there are also tax considerations. We hope to not take out more than 3-5% of the stock in any given year and supplement with cash flow for the remaining payment.

If the cost of the project was half, we’d still do the same thing.

Anonymous wrote:Refinanced our mortgage to pull out cash but this was 10+ years ago when rates were low

Same. We of course went over, so we had to pull money from savings. Not too much, certain things we let slide, like redecorating. We waited a couple of years to do that, once we had amassed a cash reserve.

We paid cash. I thought that was unusual but judging from this thread it isn’t.

We spent about 200k renovating our weekend home on the Shenandoah (which is not as fancy as it sounds -- we renovated because it was essentially a shack; the location is amazing though). There was no mortgage on the property, it had been paid off about 7 years ago. We paid cash for the renovation.

We saved for 5 years and paid cash. The downside was that prices had all gone up after the pandemic.

HELOC, which we paid off in about 7 years (started just as the youngest left daycare and pushed those payments all to the HELOC)

Anonymous wrote:Refinanced our mortgage to pull out cash but this was 10+ years ago when rates were low

Same

Refinanced our mortgage to pull out cash but this was 10+ years ago when rates were low

Checks

Cash in 2019. We had a payment schedule, so it's not one big lump sum payment.

Cash

Did you do some sort of financing or did you use cash?

I’m debating what to do. We have about 750k equity.