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Going Crazy - Know the Way?

Picking brains...

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Picking brains...

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RockingChair
OK, so we have decided we may need more space. (Those of you who have seen my house, stop laughing!) I mean, even aside from the fact that I am a pack rat (I am working on it, really), our house is not really laid out well. It is log and skinny, with only a living room and kitchen on the lower floor. Thus, the living room is the space we do all our living in, so the bunny, dog crate, both desks, entertainment center, and kids stuff is all crammed into that room. The kitchen is really poorly designed, with the oven in the corner (who puts an oven in the corner??), making cabinet space less than it should be. We can't really have people over with this layout, and that makes us sad. Then, upstairs, there are three bedrooms, but two of them are huge, and the third is tiny (and doesn't even have a closet). So, what do we do when the kids get old enough to need their own rooms? What if we want another child someday?

So, there are more issues with this house than the fact that I have too much stuff. I am not saying my stuff does not contribute to the problem! But it only makes worse an existing problem.

Plus, we have already been talking about refinancing to take advantage of some of these great mortgage rates right now.

What to do? Obviously, our two options are to move, or to build an addition onto the house.

Moving pros:
We could move somewhere with lower taxes.
We would be able to take the money from the equity we have in this home and apply it to a new home.
We have often wondered if the work done to renovate this house before we bought it was really all done correctly. We occasionally refer to the house as the money pit, and mutter things like, "I hate this house."
Perhaps moving (again) would help with the culling of stuff, forcing us to really re-evaluate each thing we own and decide if it is really worth keeping or not.

Moving cons:
I hate moving. (Plus, we already owe our friends many moving favors.)
This house, with its current dumb layout, in the current market, will be difficult, if not impossible, to sell. (Cutting into the equity mentioned above.)
House hunting (which we did do a couple of years ago, BTW) was difficult with infants... It will be impossible with twin three year olds.
Finding a house with large rooms like this one is also pretty tough to do.
I love this neighborhood - I love being able to walk to a historical battlefield park.
I love that I will be able to walk to the kids school, and that they will start school next year instead of when they are 5.
I love that we can get on 295 within a couple of minutes and, from there, we can get to Philly, Delaware, North Jersey, anywhere really.
I love the fact that our house is on a double lot; giving us a huge yard, which is fenced in.
The timing of coordinating a sale of one house and purchase of another can be problematic.

Addition pros:
We could keep this great location.
We could design the new part of the house ourselves, getting just what we want.
We wouldn't have to move.
We would have to re-evaluate at least part of our stuff even with an addition, as I am sure we would have to make room for the work.
We could do something like rent a POD to store stuff we needed to get out of the way during the work, and it would be for a defined period of time (my fear is, that if we tried that while house hunting, we would end up needing it for years while the house hunt went on.)
Actually, the whole project of an addition would have a defined time frame, and while it might be delayed, at least we would have an idea of the time frame. Moving could take years, especially trying to sell this house in this economy.
Hopefully an addition might uncover some of the existing issues with this house. (For example, our current basement is just shy of being able to ever be finished, as it is short. It might be wise, if we added an addition, to get a basement added on with it (they have to dig out a foundation, anyway, so they may as well just dig out enough for a basement), and maybe close off the old, less than functional, basement.)

Addition cons:
Can our neighborhood support the new value of the house after we build an addition?
Would the uncovering of flaws in the current house put us way over budget to fix them?

I am really leaning toward the addition right now. Even if the neighborhood couldn't support the higher value of this house after an addition, I am hoping that the addition would make this our forever home, and we wouldn't really have to deal with that. But what if that doesn't work out? Will building an addition be a really stupid move financially?

I know some of you have experience with this - I would love some input. We are considering hiring a financial planner for a consultation about all of this, but I am concerned about the cost of that. Also, that a financial planner wouldn't necessarily have the information we need about real estate, but would just try to get us to invest money... So, what do you all think??
  • Keep in mind that your mortgage schedule resets when you refinance, which is why banks are so happy about the option. Sure, you're paying a lower rate, but for the first few years you're paying nothing but interest, with nothing into equity.

    We're eight years into a fifteen year mortgage and making serious headway on equity now, which is why we're not refinancing for a half a percent lower.
    • I think for us it would be almost 1 1/2 percent... So for that much I am thinking it would be beneficial. But I am not sure exactly where the cutoff is.
      • Yeah, depending on the value of your mortgage, that might be worth it, especially if you're not planning to move.
      • You'll want to look at a Loan Amortization Table. That will tell you the amount of interest vs. principle being paid on each loan payment. There's one at Bankrate or you should have one in as a Wizard in Excel.
  • As usual our live continue to be the same just in different states. We are in the midst of an addition right now! We decided when we moved into the house 7 years ago that we were never moving again (I've moved 31 times in my life - yes 31 - and I'm done!) Then we had twins and there are only two bedrooms upstairs. (there's a guest room downstairs) Hrm. So we added on. We have solved a lot of our problems with this addition. Because we live on the bay, we can't have a basement and our exsiting house had all vaulted ceilings so we had no attic. Didn't do a lot for storage! So the addition is two stories, with regular ceilings and a HUGE attic. Downstairs is one big room w/ a big closet that now houses the workout equipment, some kid stuff and (someday) a hot tub. Upstairs we expanded our library (the tiny bedroom w/ no closet like yours), added a bedroom for Lizzy (just moved her in last night!) and TWO craft rooms - one for me, one for the hubby. We still have to finish mudding a and painting and flooring in all but Lizzy's room, but it's WONDERFUL. We loved our house before, but now it's just about perfect! So I would vote for the addition since you like where you live, need more space, and can design it yourselves. I would caution however, that you research your builder. Ours started out ok but ended badly when he tried to spring a surprise final bill on us for stuff we either didn't agree to or stuff he actually didn't do/install! Also try to talk to folks in the county who've done the same thing and see how your inspectors are. Our's was a lier and a jerk who came up with something new on each visit to fail us for that were NOT in accordance w/ the international code. He was just trying to run up fees (you pay every time you fail your final starting at the thrid time) and I also think he was one of those power trippers. We finally ended up calling his boss after the 5th time he was going to fail us for something that was actually correct the 4th time he failed us.
  • Watching my sister move into a house under construction with two small children a question comes to mind of how comfortable are you to have your two curious explorers next to a construction site? Secondly, how comfortable are you to live with the confusion, dust and dirt of the construction for the duration. You mention hating the house - is it the layout only or is something else nibbling in the back of your mind going "this is not where I should be"? If everything else is perfect and the new house has the kitchen space you need (and the old house kitchen can be turned into say ... a brewing room) then fine.

    Prudence
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