Help me finance my kitchen renovation
August 8, 2013 10:30 AM Subscribe
We bought our house last year with 15% down, knowing that we would need to redo the kitchen. We think it's going to cost about $25 - $30K. (Estimate is $19K without appliances or counters or cabinets.) When I contacted the guy who sold us our (FHA) mortgage at our local bank, he said that he was unwilling to lend more than 20% of the value of our house. Since we paid 15% down a year ago, obviously we haven't reached the point where we have paid 25% and can borrow another 5%.
Bonus time sensitivity
: I'm pregnant, the baby is due at the end of February, and the kitchen layout is currently not very functional for something like a million baby bottles on a drying rack. Further snowflakes inside.
posted by data hound to home & garden (9 answers total) 3 users marked this as a favorite
The mortgage guy at the bank suggested that we approach a bank or credit union where they're willing to lend 90% of the value of our place (it's actually a 2 family condo), obviously at a higher interest rate.
I have also looked into a 203K FHA Streamlined loan (which is limited to $35K - perfect for our needs) but I am having trouble finding a broker or any information at all about what the interest rates might be like (compared to a 90% loan) and I kind of don't know where to get started on all this. I've looked on the HUD website and it's a morass of info with a lot of dead links and without much specifically about WHERE I can talk to someone about a 203K streamlined or even what the damn interest rates might be.
We have good-to-excellent credit, earn a decent income, and have made all our mortgage payments on time. We actually have $25K saved but we don't want to use that for a kitchen reno - that's really emergency money in case one of us loses our job.
Kitchen details, in case it matters:
It has very little counter space and very limited cupboard storage - the layout as a whole is pretty non-functional. We have solved the storage issue with things from Ikea, but the counter space is still a huge problem and we have 2 kitchen islands already. There are other privileged people problems like a sink that doesn't drain, borked insinkerator (the drainage problem is obviously related to the insinkerator), not enough circuits (lights dim when the refrigerator cycles or when the microwave is on), no dishwasher, no rangehood, yadda yadda.
We have a contractor we like and trust, the house was built in 1885 so there will doubtless be added costs with the electrical when we add circuits, there may be similar plumbing issues when we try to install the dishwasher.
Since the work is interior, there shouldn't be a problem with condo association permission (we are majority owners anyway.)
We live in Massachusetts, in a city which is very heavily regulated re: work permits and inspection, so that's also going to add expense.
I am not interested in hearing about ways to make the current kitchen workable. I'll do that if I have to, but this question is about ways to borrow this money. I would especially love to hear any experience that anyone has with a 203K streamlined loan.