Moneymakeover Expecting twins! Advice needed on how to fund house renovation!

M

matrixworld

Registered User
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26
Age: 36

Annual gross income from employment or profession: 130k
Spouse: N/A, stay at home.

Monthly take-home pay:
From employment: 6150e (200e to ESSP, 250e AVC)

Type of employment: e.g. Civil Servant, self-employed: Private

In general are you:
saving: 2.5k
1,330e towards extra mortgage payment
1,250e investments

Rough estimate of value of home: 420k

Amount outstanding on your mortgage: 118k

What interest rate are you paying: 2.1%

Other borrowings – car loans/personal loans etc: No

Do you pay off your full credit card balance each month? No credit cards

Savings and investments: 172k

Company stock: 20k (90k yet to vest), note the company shares are down 18% since the last post so i may not factor this in to the equation.
cash: 12k
Crypto: 70k
Stocks: 30k (mix of SP500, commodities etc) but in 2 separate accounts?
Precious metals: 20k

Do you have a pension scheme: Yes, Zurich, 104k so far

Do you own any investment or other property?
No

Ages of children: 2 and 9

Life insurance: Mortgage protection

What specific question do you have or what issues are of concern to you?

We just found out we are expecting twins so it's a bit of a shock to the system. We are happy in our 3 bed room house and consider it our forever home at least up until the kids are grown but realize we need to a renovation which will entail:

- An attic conversion for a new bed/bathroom
- Log cabin for an office
- Rear extension
- New windows and doors
- Insulation

Haven't priced all the jobs but guessing, in today's market, this will cost a minimum of 100k?

As we will have 4 kids we need to trade in one of the cars for a 7 seater which will likely need an additional 5-8k towards it.

As someone who is interested in investing, I'm hesitant to offload all my positions to make this work due to the potential lost opportunity cost, should we remortgage partially? We can probably come up with 30k cash between now and the projected start time.

Any advice is really appreciated!

TIA
 
Previous Money Makeover here in case any of the feedback still applies.

Moneymakeover - Mid working life check-in - Am I on the right path?

Age: 36 Spouse’s/Partner's age: n/a Annual gross income from employment or profession: 128k Monthly take-home pay: From employment: 6100e (200e to ESSP, 250e AVC) Type of employment: e.g. Civil Servant, self-employed: Private In general are you: saving: 2.5k 1,330e towards extra mortgage...
www.askaboutmoney.com
 
Congratulations, nice to see happy news.

- get 3 builders quotes for the entire job
- ask how long the job will take
- ask when can they start
- will the renovations increase house value
- having quotes will focus you on figures and possibilities
- there is no need to overpay your mortgage as the interest rate is so low
- go and speak to your bank about a renovation loan
- you’ve overpaid your mortgage, maybe that means you can stop paying and instead fund the renovation
- are you sure ye need an extension, plus office shed plus attic?
- do up different options multiple times
- look at steel tech or similar as an office shed option, compare prices to builders quote
- planning, sigh, certain sizes are exempt…
 
Congratulations. If i was in your position i would be looking to change house to a 4 bed with option to do attic. A family of 6 will probably find an extended 3 bed too small. And i would day the work you are looking at is more like 200k than 100k.
 
matrixworld said:
Amount outstanding on your mortgage: 118k
Click to expand...

matrixworld said:
Crypto: 70k
Stocks: 30k (mix of SP500, commodities etc) but in 2 separate accounts?
Precious metals: 20k
Click to expand...

Effectively you are borrowing to invest in Crypto and precious metals. That is crazy. It has worked out well for you so far, but don't be greedy. Take your profits.

Normally, I would say clear your mortgage but as you will need the money, then you should not do so.

Conserve cash. So stop unmatched contributions to your pension fund and stop overpaying your mortgage.
 
Congratulations on the impending arrivals. I have two kids and did a single storey extension this year (45sqm), it was €145k before kitchen, painting, furniture etc. Close to 200k

Had to move out for 6 months so consider how you would cover that.

This is going to cost you way more than you think, you will need to remortgage, your existing assets won't cover all the work you're looking to do.

Also, you won't get the full mortgage quantity in one go, they will only let you draw down in stages as work is done. Your builder may have different payment dates to the banks release of funds which you will need to cover with cash. We had €80k put aside and cash flow was still tight.

All told, I'm glad we did the extension, love where I live but it would have been more cost effective and simpler to sell and buy a larger house to release the equity in the house rather than borrowing more against the value.
 
Really appreciate everyone's input so far! For some odd reason it won't let me reply directly to each post.


@misemoi @Abalone can absolute see where you are coming from, i had considered it but we really got lucky getting this location-wise, it is in a great spot and looking on daft/myhome, 4 beds are up for 600-650 ish (low ball price imo) and all look to be in need of probably an additional 100k worth of work. Plus our garden is twice the size of the average, maybe more so it's something we are not taking for granted as it would be fantastic for the kids.
 
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@DannyBoyD

i did take some profits but it is in a bear market at the moment so would rather hold my position as i am actually down a bit over the past few months.
 
@Abalone i had no idea a single story extension could take so long! Will keep this in mind.


Are you happy with the extension overall? is it big enough?
 
Bronte said:
Congratulations, nice to see happy news.

- get 3 builders quotes for the entire job
- ask how long the job will take
- ask when can they start
- will the renovations increase house value
- having quotes will focus you on figures and possibilities
- there is no need to overpay your mortgage as the interest rate is so low
- go and speak to your bank about a renovation loan
- you’ve overpaid your mortgage, maybe that means you can stop paying and instead fund the renovation
- are you sure ye need an extension, plus office shed plus attic?
- do up different options multiple times
- look at steel tech or similar as an office shed option, compare prices to builders quote
- planning, sigh, certain sizes are exempt…
Click to expand...
This is a solid game plan, i plan to follow this and didn't think of the steel tech so thanks so much!
 
matrixworld said:
, 4 beds are up for 600-650 ish (low ball price imo) and all look to be in need of probably an additional 100k worth of work. Plus our garden is twice the size of the average, maybe more so it's something we are not taking for granted as it would be fantastic for the kids.
Click to expand...
In that case then i would say be more ambitious with your plans. A big garden is great but you spend more time indoors. Kids get bigger and are often happier in communal spaces like playgrounds and greens for playing. And sports and other organised activities mean you spend less time at home once they are older. So i would consider a 2 story or large ground floor extension. But when you price it up don't be surprised that to move would actually be cheaper.
 
Ultimately you'll make your own decision; but keep in mind, your extended 3 bed w 150k (or whatever) spent on it will likely sell for less than the 4bed with 100k spent on it.

Its always more effective to buy the space you need.
 
matrixworld said:
This is a solid game plan, i plan to follow this and didn't think of the steel tech so thanks so much!
Click to expand...
You know it’s impossible to get tradesmen unless it’s big jobs, a builder will have his mark up, I wouldn’t contemplate staying in the house for it, you will be divorced if you do! On the plus, location is key, but you added in one very pertinent point, the garden is large. Could you do us a back of an envelope drawing of current house and then show us extension please. Are you semi d, terraced?, as your lady wife is SatH could ye rent a holiday home outside peak season, move in with parents summer months? Could you get “shed” installed, live in it with school going 9 year old school days…. You need as much thought on the family living during renovation as you put into finances and work. I’d put up with a lot, but, 2 kids, pregnant with twins, mmm.
 
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misemoi said:
So i would consider a 2 story or large ground floor extension. But when you price it up don't be surprised that to move would actually be cheaper.
Click to expand...
It may make way more sense a two story, going up another floor has most of the cost sunk into the foundation and roof already, no need for attic and garden office. That’s then taking less garden space. If it’s a typical 3 bed he could do an extra kitchen area, study, with extra bed upstairs and en-suite. He’d need planning though.
 
Bronte said:
It may make way more sense a two story, going up another floor has most of the cost sunk into the foundation and roof already, no need for attic and garden office. That’s then taking less garden space. If it’s a typical 3 bed he could do an extra kitchen area, study, with extra bed upstairs and en-suite. He’d need planning though.
Click to expand...
not a bad shout, how easy is it to object to this?
 
Assuming you are in the early stage of pregnancy, you might just have enough time to buy but not to get the work done. With a school age child (needing to be near their school) a pre schooler and infant twins, and by the sounds of your salary a busy job, think carefully about sequencing of getting work done. Consider things like the suggestion of staying with family, even a short term school.move if needed. Look at certain terms where there are more holidays (like the rest of this school year) where disruption to attendance will be lower impact. You don't need the work done straight away but plan for when you can feasibly get it done.

Again this would lean me more towards buying than building as end to end it would be less disruption even if it is more costly. I am sure your head is spinning with the news so take some time to think of all options.
 
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