Remodel, move, or make it work?

[myhoney]

We have a 3bdr, 2bath home, approx 1300 sq. ft. We have redone just about everything over the past 7 years, and have about $60k in equity. We recently found out we are expecting baby #3, which is wonderful news, but a total surprise, and totally unplanned. (we had decided to stop at 2!) Two of our bedrooms are a great size, and the third (currently our playroom) is 13x9.

DH and I are trying to decide what to do. I was working part time (by choice) until both kids kids were in school, which would have been 2012 (we were so close!). My bosses are wonderful, and are still ok with me staying part time until this baby goes to school. We can make our mortgage/car pmts fine. Some months might be a little tighter than others, but we're in a good place. I'm trying to figure out, though, how to make our house work for a family of 5.

Remodel:
We had always planned to put an addition on the small bedroom, as it's on the first floor, and then figured we could stay here til we are old! We could refinance (at a lower rate than we pay currently) and do the addition, and stay here. Maybe also finish the basement. But, the eat in kitchen isn't huge, neither is the living room.

Move:
We currently pay PMI of $42 since we didn't put 20% down. With the equity we have, we could easily put 20% down on a new house, so we would get a lower interest rate, and save that PMI cost. We have roughly figured it out that we could add almost $40K to our current mortgage at the new rates and with no PMI and only pay ~$50 more per month! But, we would have to finish a few projects up around here (maybe $1500 and some time). We could get either a 4bdr house, or a larger 3 bdr and still have the kids share, but get some more living space.

Make it Work:
We bought the house next door to my ILs. (It's really not bad )The kids love it, and our kids are their only grandkids. My MIL also watches my kids on the days I work (2x per week). It would be hard to leave, but we'd only plan to move within 10 minutes. I know a family that had 10 kids that lived in a smaller house than ours, so I know it's all about perception. I just don't know if I have that perception!

I come from a larger family, and at holidays, there are 17 (soon to be 18!) of us at my mom's dinner table. My DH has one sister, unmarried, no kids. His parents' house is identical to ours. MIL already doesn't know how we are all going to fit the now 8 of us at dinners. And so I look down the road, and wonder how I'll fit my grown family in this house.

With interest rates this low, this is the time to do something. My bosses (financial planners) and our mortgage broker all agree that once rates start rising, we won't seem them this low again in our lifetime. So, I don't want to plan to move later. Everyone we've talked to pretty much tells us we have some tough choices to make. I feel like my future rides on this. I don't want to cause us financial hardship, but I honestly would like more space. But you never know what surprises lay ahead (like this baby). DH has a good job, my job is waiting for me, but...

So, what would you do?

 

[ilovemk76]

We have a 3bdr, 2bath home, approx 1300 sq. ft. We have redone just about everything over the past 7 years, and have about $60k in equity. We recently found out we are expecting baby #3, which is wonderful news, but a total surprise, and totally unplanned. (we had decided to stop at 2!) Two of our bedrooms are a great size, and the third (currently our playroom) is 13x9.

DH and I are trying to decide what to do. I was working part time (by choice) until both kids kids were in school, which would have been 2012 (we were so close!). My bosses are wonderful, and are still ok with me staying part time until this baby goes to school. We can make our mortgage/car pmts fine. Some months might be a little tighter than others, but we're in a good place. I'm trying to figure out, though, how to make our house work for a family of 5.

Remodel:
We had always planned to put an addition on the small bedroom, as it's on the first floor, and then figured we could stay here til we are old! We could refinance (at a lower rate than we pay currently) and do the addition, and stay here. Maybe also finish the basement. But, the eat in kitchen isn't huge, neither is the living room.

Move:
We currently pay PMI of $42 since we didn't put 20% down. With the equity we have, we could easily put 20% down on a new house, so we would get a lower interest rate, and save that PMI cost. We have roughly figured it out that we could add almost $40K to our current mortgage at the new rates and with no PMI and only pay ~$50 more per month! But, we would have to finish a few projects up around here (maybe $1500 and some time). We could get either a 4bdr house, or a larger 3 bdr and still have the kids share, but get some more living space.

Make it Work:
We bought the house next door to my ILs. (It's really not bad )The kids love it, and our kids are their only grandkids. My MIL also watches my kids on the days I work (2x per week). It would be hard to leave, but we'd only plan to move within 10 minutes. I know a family that had 10 kids that lived in a smaller house than ours, so I know it's all about perception. I just don't know if I have that perception!

I come from a larger family, and at holidays, there are 17 (soon to be 18!) of us at my mom's dinner table. My DH has one sister, unmarried, no kids. His parents' house is identical to ours. MIL already doesn't know how we are all going to fit the now 8 of us at dinners. And so I look down the road, and wonder how I'll fit my grown family in this house.

With interest rates this low, this is the time to do something. My bosses (financial planners) and our mortgage broker all agree that once rates start rising, we won't seem them this low again in our lifetime. So, I don't want to plan to move later. Everyone we've talked to pretty much tells us we have some tough choices to make. I feel like my future rides on this. I don't want to cause us financial hardship, but I honestly would like more space. But you never know what surprises lay ahead (like this baby). DH has a good job, my job is waiting for me, but...

So, what would you do?

If you have more than 20% down you can get the house appraised and drop the PMI.

I would refi, bank the PMI and mortgage saving and then stay where you are. Eventually in a few years you can either move or add on.

I have a girlfriend who had 3 kids (all grown up now) and the house was 800 sq feet.

 

[Shelly F - Ohio]

My DH grandma raised 7 kids in a 3 bedroom house. I am sure you can make it work. Remember these kids will grow up and move out so if you buy a bigger house when those kids move out you will be left with a house that is too big. Will cost more to heat and cool. Plus remember the appraisal value of homes have drop about $25k - $40k so if you try to sell/refinance dont count on having $60k in equity in your home.

 

[LorieDisneyLover]

It sounds like you already have an ideal location and living next to the in-laws is working out for you. You know what they say about real estate -- location, location, location!

Remodeling and adding-on sounds like a good solution -- especially if you can finish the basement ... that could become the playroom and maybe even more living space/bathroom, etc.

Plus you will not have the hassle of selling your house in this market and going through the process of packing/moving while pregnant.

If you are basically happy with your house remodeling (if you can) might be best.

 

[myhoney]

If you have more than 20% down you can get the house appraised and drop the PMI.

Unfortunately, we bought through a first time homebuyer's program, and they only consider the loan value. We must have 20% of the loan paid off, they do not consider market value. We've looked into it.

 

[myhoney]

Plus remember the appraisal value of homes have drop about $25k - $40k so if you try to sell/refinance dont count on having $60k in equity in your home.

Our house was recently appraised, and Buffalo, fortunately, has not had the same kind of market swings as the rest of the country! But, we do realize that we might not get what we would expect, but to the tune of $5k difference. We owe $64K, and should easily sell between $115k and $122k, but it would all depend on the buyer!

 

[Teresa Pitman]

I am inclined to suggest you stay where you are - the location is so perfect - and just let the kids share a room. Young kids in particular LIKE to share! I have four kids (grown now) and at one point, we put three kids into what was supposed to be the house's master bedroom, had the baby in with us in a smaller bedroom, and used the third bedroom as a home office. If you are able to finish the basement that will give you more play area for the kids. Maybe you can even set up the basement so you can use it for those big family get-togethers.

Teresa

 

[mombrontrent]

Our house was recently appraised, and Buffalo, fortunately, has not had the same kind of market swings as the rest of the country! But, we do realize that we might not get what we would expect, but to the tune of $5k difference. We owe $64K, and should easily sell between $115k and $122k, but it would all depend on the buyer!

Wow house prices are CHEAP in Buffalo! It's crazy considering just a jump across the border here in Canada prices are crazy high, especially anywhere near Toronto. We live an hour north of Toronto and we sold our 1050 sq ft three bedroom TOWNHOME with ONE bathroom for $192,000 last summer. Closer to Toronto and you would be looking at $300,000 at least for the same house. We moved becasue with 3 kids that house was just too small for us even with the finished basement. However in your case with the inlaws next door I might try to make it work. If you could finish the basement that could be a great rec/playroom and maybe do the addition in the future. However one thing I do love about our new house is that the kids all get their owm bedrooms. Sounds like you have a tough decision. We stayed in our small house until the yougest was 3 and we REALLY needed space. My oldest was also 11.

 

[myhoney]

mombrontrent - yes they are!! Our neighbor has a friend from just over the border, and she always tells him how cute our house is, and that it would sell for so much more in her town! We could get a 3 or 4bdrm, 1.5 bath, 1700 sqft for $155k-$160k. There are a lot of great things about Buffalo!

 

[DawnM]

So, if you refi will you still need to pay PMI?

How much do you still need to pay down to get out of paying PMI?

Your house is not to small for a baby, and you have plenty of time to think about this IMHO.

 

[mrsabbott]

I understand your dilemma. We purchased our 3 br house with the thought that we would not be having any more children. We had 3 girls, two of them shared a room (bunk beds) and the oldest had her own room. Then...surprise! We got pregnant and had a BOY! So, now we have 3 girls in one room (the bedrooms are small) and the upstairs room is the boy room/toy room/guest room. Our girls are young, so sharing a room isn't that big a deal for now. But as they get older it may be.

However, if you love your home and location and can afford to add on or re-do the basement.. then go for it! I like our house and location but adding on isn't an option for us. We will likely have to try and sell and buy a new home. But if we had the option to add on or a basement to refinish then I would definately do that!

 

[marmalade]

I am going to assume you are not technically in Buffalo, because you are willing to stay and keep your kids in the same school district. If I were you I would stay and make it work. You have remodeled it the way you wanted it and planned on staying before the baby, so I would make it work with baby.

The housing market in this area is fickle, people know what houses are worth based on the area. If you house is in an area where they typically don't go for $115-$122 then yours might not sell even though it is completely remodeled.

 

[malibuconlee]

I haven't seen any mention of realtor fees and closing costs on both selling your current home and buying another. I say stay put for now and save your money. I shared bedrooms with my brother when they were remodeling our house then my sister growing up. I survived!

 

[ToddyLu]

Sounds like you are trying to talk yourself into doing something, moving that really isn't necessary. Three (soon to be) happy kids, help next door, a house you can afford--how many people want that these days. Just looking at the info provided and considering this is an Internet Message board and I live 2,000 miles away ( I have been to Buffalo). My gut is telling me to stay where you are. Save your money and head to Disney when the new baby is 3

 

[myhoney]

I am going to assume you are not technically in Buffalo, because you are willing to stay and keep your kids in the same school district.

You are right! We are in West Seneca, in the East district, which is considered to be preferable to West. Our figures are based on the area.

 

[Darcy03231]

When DH and I bought our home we had four young children. We went with a 5 brdm/3.5 bath. Well, as children do, they grew up and have started moving away.

We now have this very large home and only 2 kids still living at home and it won't be long before they're gone too (DD#2 is 20 and in college and DS #2 is a senior in high school). The house is now way too big for us. I'm heating/cooling, and cleaning all of these empty rooms. While we have loads of equity, I really don't want to move twice to downsize (we already own a smaller home that we plan to retire to, but its an hour away and we still have to work for a few more years).

I'd stay where you are and make it work.

 

[myhoney]

Three (soon to be) happy kids, help next door, a house you can afford--how many people want that these days.

You're right. We are blessed in many ways.

I have called a remodeling company to come out for an estimate/ideas. I think it's just the interest rates that are making me consider other options, and the thought that moving sounds easier than living through them tearing off the back of our house! With all the remodeling we've done in the last 7 years, another big project is like, really? Although this one, we won't be doing ourselves!

 

[fakereadhed]

I was in the same position, but the only spare room we had has no heat(old Victorian with plaster walls)that we use as an office and was not an option. My mom suggested putting French Doors in one third of our living room where we had an archway to make another room- very small one. We did that, and it worked! Babies don't need much space really, and when he outgrew his toddler bed we but in a loft bed. Now that his sisters are older I'm so glad we didn't have them share a room.

I say make that playroom work!

 

[punkin]

You're right. We are blessed in many ways.

I have called a remodeling company to come out for an estimate/ideas. I think it's just the interest rates that are making me consider other options, and the thought that moving sounds easier than living through them tearing off the back of our house! With all the remodeling we've done in the last 7 years, another big project is like, really? Although this one, we won't be doing ourselves!

I am still confused why you can't refinance to take advantage of the lower rates and get rid of your PMI at the same time.

 

[Dizneydaz]

Don't Move, Improve! That's my motto (okay, I draw room addition plans for a living )

But seriously, it sounds like a great fit for you. You love the location and a small add on on the first floor wouldn't cost that much.

Congrats on the new baby!