Comments on: Blow-by-Blow Account of a Housing Addition, part two: Capitalization http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/ personal finance that makes cents Mon, 08 Sep 2008 08:26:38 +0000 http://wordpress.org/?v=2.5.1 By: Michael http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-94171 Michael Thu, 02 Aug 2007 16:50:55 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-94171 In some cities there, including Cleveland, where I live, there are special home equity loan programs available at substantially discounted interest rates. When I borrowed under one of these programs to do major home renovations, the rate was 2% with no income limits. Before you just start calling around to banks, it may be worthwhile to investigate whether these discounted loans may be an option where you live. In some cities there, including Cleveland, where I live, there are special home equity loan programs available at substantially discounted interest rates. When I borrowed under one of these programs to do major home renovations, the rate was 2% with no income limits. Before you just start calling around to banks, it may be worthwhile to investigate whether these discounted loans may be an option where you live.

]]> By: ~scott » Blog Archive » Linking Logs :: 2007-07-31 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-94028 ~scott » Blog Archive » Linking Logs :: 2007-07-31 Tue, 31 Jul 2007 21:52:58 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-94028 [...] Blow-by-Blow Account of a Housing Addition, part two: Capitalization - For those considering adding on to their house, this is the second part in a series examining the real-life experiences of one couple. [...] [...] Blow-by-Blow Account of a Housing Addition, part two: Capitalization - For those considering adding on to their house, this is the second part in a series examining the real-life experiences of one couple. [...]

]]> By: telly http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93993 telly Tue, 31 Jul 2007 16:22:41 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93993 I didn't realize you were including pre-tax savings. That definitely makes the mortgage much 'roomier'. :) Thankfully we live in an area where homes are pretty inexpensive, so we're at around 12%. I didn’t realize you were including pre-tax savings. That definitely makes the mortgage much ‘roomier’. :) Thankfully we live in an area where homes are pretty inexpensive, so we’re at around 12%.

]]> By: JerichoHill http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93920 JerichoHill Mon, 30 Jul 2007 20:10:10 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93920 Telly, In the DC market, 36% of our take-home pay is considered roomy (this number includes insurance and taxes). Of course, take-home pay is affected by your pretax savings rate, which is quite large for us. Had we kept a standard pretax savings rate, it would have been around 25%. Additionally, percentages can mean different things depending on what your overall income level is. Telly,

In the DC market, 36% of our take-home pay is considered roomy (this number includes insurance and taxes). Of course, take-home pay is affected by your pretax savings rate, which is quite large for us. Had we kept a standard pretax savings rate, it would have been around 25%.

Additionally, percentages can mean different things depending on what your overall income level is.

]]> By: telly http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93908 telly Mon, 30 Jul 2007 16:55:58 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93908 A mortgage payment of 36% of take-home pay is considered roomy??? Yikes! A mortgage payment of 36% of take-home pay is considered roomy???
Yikes!

]]> By: W.C. Varones http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93844 W.C. Varones Sun, 29 Jul 2007 19:54:09 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93844 Then there are those who don't understand housing math. The story of an MBA student who thinks it's smart to buy a 1-bedroom condo for $715,000: http://wcvarones.blogspot.com/2007/07/poor-reflection-on-usf-mba-program.html Then there are those who don’t understand housing math.

The story of an MBA student who thinks it’s smart to buy a 1-bedroom condo for $715,000:

http://wcvarones.blogspot.com/2007/07/poor-reflection-on-usf-mba-program.html

]]> By: JerichoHill http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93807 JerichoHill Sat, 28 Jul 2007 22:30:14 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93807 fwiw, there will be a 4th part of this series, detailing how to do a few big projects by yourself. So far, we've 1) Built a fence 2) Installed Radiant Floor Heat fwiw, there will be a 4th part of this series, detailing how to do a few big projects by yourself.

So far, we’ve

1) Built a fence
2) Installed Radiant Floor Heat

]]> By: JerichoHill http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93806 JerichoHill Sat, 28 Jul 2007 22:27:00 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93806 Jim, We've already maxed em out =) Jim,

We’ve already maxed em out =)

]]> By: Jim http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93802 Jim Sat, 28 Jul 2007 20:23:41 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93802 Don't use your monthly budget surplus to prepay the mortgage unless you have already maxed out your retirement contributions first. Don’t use your monthly budget surplus to prepay the mortgage unless you have already maxed out your retirement contributions first.

]]> By: Jason Dean http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93801 Jason Dean Sat, 28 Jul 2007 20:03:26 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93801 It's good to see a first-hand account of someone who used the internet to get a better rate. A lot of people think that local companies can always give them better prices and service, but with the internet, almost everything is local now. I'm glad that you guys were able to get a good deal and start your addition. Congratulations! It’s good to see a first-hand account of someone who used the internet to get a better rate. A lot of people think that local companies can always give them better prices and service, but with the internet, almost everything is local now. I’m glad that you guys were able to get a good deal and start your addition. Congratulations!

]]> By: FourPillars http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93790 FourPillars Sat, 28 Jul 2007 16:44:30 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93790 I'm impressed with your planning and thinking - you've done a lot more than most "experienced" people. We did a gut reno of our new house - did a lot of the work ourselves and contracted out quite a bit. We had no idea what things cost and how much work it was and it was a bit of a financial disaster to say the least. The house turned out quite well and we haven't sold it so I guess it worked out (sort of) in the end. I'm new to this site but I'll be checking out your full story in the forums since I'm sure it's quite interesting. Mike I’m impressed with your planning and thinking - you’ve done a lot more than most “experienced” people.

We did a gut reno of our new house - did a lot of the work ourselves and contracted out quite a bit. We had no idea what things cost and how much work it was and it was a bit of a financial disaster to say the least. The house turned out quite well and we haven’t sold it so I guess it worked out (sort of) in the end.

I’m new to this site but I’ll be checking out your full story in the forums since I’m sure it’s quite interesting.

Mike

]]> By: JerichoHill http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93789 JerichoHill Sat, 28 Jul 2007 16:31:54 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93789 Jeff, Of course you're correct. I suppose the purpose of saying "home equity" is to indicate that the loan was secured by the difference between the appraised value of the home and the outstanding liens Jeff,

Of course you’re correct. I suppose the purpose of saying “home equity” is to indicate that the loan was secured by the difference between the appraised value of the home and the outstanding liens

]]> By: Jeff http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93786 Jeff Sat, 28 Jul 2007 14:49:01 +0000 http://www.getrichslowly.org/blog/2007/07/28/blow-by-blow-account-of-a-housing-addition-part-two-capitalization/#comment-93786 A bit of semantics here, but you didn't fund your addition with your home equity -- you funded it with your future income. Banks and real estate agents have managed to turn the word "equity" into something that sounds liquid, which it isn't. But still, I have to say congratulations -- sounds like you've done a good job of planning and shopping around. I'm sure you'll love your new addition. A bit of semantics here, but you didn’t fund your addition with your home equity — you funded it with your future income. Banks and real estate agents have managed to turn the word “equity” into something that sounds liquid, which it isn’t.

But still, I have to say congratulations — sounds like you’ve done a good job of planning and shopping around. I’m sure you’ll love your new addition.

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