Here's the situation, I'm married, wife's a stay at home mom, have 2 boys ages 7 and 4 with a girl on the way in 2 months. We currently have a 3 bedroom house (1850 sq ft) we've been in for 10 years. Paid $110,000. It was really a mess when we bought it, not well taken care of but only 9 years old. Originally had a 30 year mortgage, but made bi-weekly payments. Refinanced ~6 years ago at 5.375% for a 15 year loan, 9.5 years left on this mortgage. Current Market value is ~$150,000, $65,000 is left to pay off (This is in Upstate NY). Never took a HEL/HELOC.

Done my share of work on the house, built a huge deck, built a shed, built a swingset, landscaped the front and back, finished the basement (kids play area/TV couch and computer area), totally gutted and redone a bathroom, new carpets in living room, bedrooms etc.

With the new baby coming, we're moving the 2 boys in together. The 2 kids bedrooms are kinda small, but we'll make due. I'm a little worried about when they get older 16/13.

Anyway, The kitchen is getting worn, would like to redo the whole thing (dishwasher is currently not built in) floors in kitchen, hallway and foyer are linolium and are looking bad. Front of the house is cedar sided, with vinyl on the sides and back, wife would like to replace all of this and just get it sided. Roof will need replacing soon.

So basically I'd like to redo the kitchen, new floors, re-side the house and put a new roof on in about 5 years. This is likely to cost $50,000-$60,000.

My current income is $70,000.
I have no debt besides the mortgage, I own my car free and clear (2001 Malibu) and currently leasing a Trailblazer for $280 a month (lease expires in August).
I have $150,000 in my 401K and ~$25,000 in an IRA. ~10,000 in saving currently.

The question I have is whether I should have this work done on the kitchen, roof, siding and take out a HEL to pay or should I consider selling this house and buying a new house for $200,000 that is relatively newer or brand new that has 4 bedrooms and won't likely need any work for a while.

I'm feeling like the $50-$60,000 I spend on the upgrades is a waste of money (I know it's not) and I'm not likely to increase the value of my home too much with these upgrades. Homes in my neighborhood probably average $150,000, while some are 165/170. I'm really having a tough time deciding if I should look for a new house in a few years, but I hate the idea of starting a new mortgage as mine will be paid off in about 9 years. I'm trying to hold off on the kitchen upgrade /siding as long as I can because I'd rather save up the money and pay it than take out a loan, I just don't think it's possible.

Thanks for any advice.

Also, I'm going to need a new vehicle in August and I currently carry the GM card with $3,000 in earnings, so I was leaning towards a lease again, maybe a minivan or SUV but I'd like to have room for 3 kids and stuff. Having $3,000 off is really making me choose a GM here. Any recommendations here would be helpful too.

rick6668 said:Here's the situation, I'm married, wife's a stay at home mom, have 2 boys ages 7 and 4 with a girl on the way in 2 months. We currently have a 3 bedroom house (1850 sq ft) we've been in for 10 years. Paid $110,000. It was really a mess when we bought it, not well taken care of but only 9 years old. Originally had a 30 year mortgage, but made bi-weekly payments. Refinanced ~6 years ago at 5.375% for a 15 year loan, 9.5 years left on this mortgage. Current Market value is ~$150,000, $65,000 is left to pay off (This is in Upstate NY). Never took a HEL/HELOC.

Done my share of work on the house, built a huge deck, built a shed, built a swingset, landscaped the front and back, finished the basement (kids play area/TV couch and computer area), totally gutted and redone a bathroom, new carpets in living room, bedrooms etc.

With the new baby coming, we're moving the 2 boys in together. The 2 kids bedrooms are kinda small, but we'll make due. I'm a little worried about when they get older 16/13.

Anyway, The kitchen is getting worn, would like to redo the whole thing (dishwasher is currently not built in) floors in kitchen, hallway and foyer are linolium and are looking bad. Front of the house is cedar sided, with vinyl on the sides and back, wife would like to replace all of this and just get it sided. Roof will need replacing soon.

So basically I'd like to redo the kitchen, new floors, re-side the house and put a new roof on in about 5 years. This is likely to cost $50,000-$60,000.

My current income is $70,000.
I have no debt besides the mortgage, I own my car free and clear (2001 Malibu) and currently leasing a Trailblazer for $280 a month (lease expires in August).
I have $150,000 in my 401K and ~$25,000 in an IRA. ~10,000 in saving currently.

The question I have is whether I should have this work done on the kitchen, roof, siding and take out a HEL to pay or should I consider selling this house and buying a new house for $200,000 that is relatively newer or brand new that has 4 bedrooms and won't likely need any work for a while.

I'm feeling like the $50-$60,000 I spend on the upgrades is a waste of money (I know it's not) and I'm not likely to increase the value of my home too much with these upgrades. Homes in my neighborhood probably average $150,000, while some are 165/170. I'm really having a tough time deciding if I should look for a new house in a few years, but I hate the idea of starting a new mortgage as mine will be paid off in about 9 years. I'm trying to hold off on the kitchen upgrade /siding as long as I can because I'd rather save up the money and pay it than take out a loan, I just don't think it's possible.

Thanks for any advice.

Also, I'm going to need a new vehicle in August and I currently carry the GM card with $3,000 in earnings, so I was leaning towards a lease again, maybe a minivan or SUV but I'd like to have room for 3 kids and stuff. Having $3,000 off is really making me choose a GM here. Any recommendations here would be helpful too.

Ramble on,
And nows the time, the time is now
To sing my song.
Im goin round the world,
I got to find my girl, on my way.
Ive been this way ten years to the day, ramble on,
Gotta find the queen of all my dreams.

goofygrin said:You've got two questions. The car one isn't one I'll answer since there are a bajillion different resources that will be better for you.

As far as your house, some of that 40-60k isn't upgrades but maintenace (roof, siding, etc.) and if you were to sell you'd get dinged for it and have to pay it anyway.

Thanks for the response. You're partly right. The roof will have to be done in 5 or it will come out of the value when I sell. As to the siding, it's in fine shape and I just restained the front cedar last year. It doesn't have to be done, my wife just want to change it. I'm sure I could get another 15 years out of it anyway.

cme4oil said:Honestly, this is such a personal decision... why would you want to consider doing what someone else suggests you do? You need to simply sit down with your wife, address you priorities and make your decisions. The new house your thinking about sounds like a want and not a need.

If you really want advice, don't do anything, think about it for 6 months and then reevaluate your feelings.

75% of the things you want to do to your current house are just that, wants and not NEEDS...

Thanks for the reply. Just looking for reasons that either option has benefits/issues that I haven't thought of. I'm definitely not doing anything right now. This is a decision to me made 2-3 years from now. You're right about the wants/needs. Sometimes it's hard convince the Wife of that.

Miser said:LOCATION, LOCATION, LOCATION!

How are the schools? How is your commute? How are the neighborhood and services? What would the new home cost?

~miser

Going to likely buy in the same town. Same schools... Cost is in first post, likely ~$200,000. Current home is $150,000

Howsabouts including a whirlpool bath and some other wife friendly improvements in the renovations? If the new houses don't have the wife friendly ammenities, the grass is no longer greener. But, your bank account will remain greener.

~miser

This is fairly complicated question for any random forum member to answer: sit down with a spreadsheet and add up all current and anticipated expenses and changes to income with several scenarios.

Consider the following:
1) You will be paying more interest than principle on a new mortgage
2) You don't have enough emergency money saved yet
3) You are just about to embark on a new car loan
4) You will incur transaction costs when selling your current house
5) You won't have time to enjoy a bigger house while your baby is small and the kids won't care

Probably the most cost-effective approach is to do a makeover on the cheap (paint, lay down your own linoleum, etc)and stay where you are, but only you can run the #'s.

rick6668 said:Originally had a 30 year mortgage, but made bi-weekly payments.

Not "bi-weekly advantage" or some other scam, I hope?

Anyway, unless you've got some other incentive to move, I'd stay where you are. You have a relatively low debt ratio and could afford to spend some money on upgrades.

Have you considered adding another bedroom to the house? Probably be a lot cheaper than moving.

The logic of calculating the costs and benefits of spending more money on the current home versus buying a new home is a good starting point.

Be very careful in valuing any of the money you spend on the current home. The repairs and renovations you list will add little resale value.

That said, also honestly calculate the cost of transitioning homes. Realtor fees, moving, and buying new furniture etc for a new home get expensive quickly.

Can you put a full 4th bedroom and bathroom in the basement? If yes, at what cost.
In your position, I would rather move now than in 8 years when all three children would need to change schools and establish new friendships.

Can you find a 4 bedroom home that needs items that you can complete yourself so you decrease the price difference in homes?

I know this was a hard question to answer.

Just wanted to say thanks to everyone for their responses. There was some helpful info in there.
I'm not goinging anywhere right now, but this gave me some ideas for the next 3-5 years.

Thanks!