upgrading home in 5-7 years- make improvements or put toward new home?

[SMKR]

wife and I want to upgrade to a bigger/newer home in 5-7 years and are wondering if it is better to take a budget of $20k and put it toward updating our current home to increase the resell value or keep it and put it toward a down payment on the home we purchase a few years down the road- which would you do?

[2165 Turbo Rail]

depends on your house... we just remodeled our kitchen because it had emerald green 1'x1' linoleum floor tiles, green and white 4"x4" back splash tiles and white femicha (sp?) counter tops

we put in Granite tops, 18"x18" tile and 6"x6" backplash natural stone tiles and spent just under $6,800 but it will make a HUGE diff in resale

[SVT Lurch]

Down payment. No upgrade gets you a dollar for dollar increase in value.

[Blackpony]

Depends on the neighborhood. If you live in a fairly new neighborhood that has new houses still being built, then save your money. If its an older already established neighborhood, then i would put some of it in the house but not all. Maybe work on a few of the bad areas (such as outdated kitchen, bathroom, etc) and save some of your money.

[2165 Turbo Rail]

of course now she wants SS Appliances

from this but with white tops


To this

[krazy kris]

where is the poll option to put it in your current mortgage and get it paid off

[SVT Lurch]

where is the poll option to put it in your current mortgage and get it paid off

Unless he actually pays it off that won't help him any more than leaving it in the bank making a measly 0.33% or whatever. The loan will not reamortize unless he requests it and there is typically a few hundred dollar fee that would likely offset the savings from the updated payment schedule.

[2165 Turbo Rail]

putting the 20k toward principle now will save him money... but with out knowing the balance, length of loan left and interest rate there is no way of knowing how up....

if you put the 20k on your principle it could get your below the 80% mark (If you aren't already below that 80% ) on your current loan which then you could drop the PMI and save a little monthly

[SVT Lurch]

putting the 20k toward principle now will save him money... but with out knowing the balance, length of loan left and interest rate there is no way of knowing how up....

if you put the 20k on your principle it could get your below the 80% mark (If you aren't already below that 80% ) on your current loan which then you could drop the PMI and save a little monthly

How will making a large principal payment save him money if he moves before it is paid off?

[2165 Turbo Rail]

not having to make the PMI monthly payment.(not much but a little each month).. he won't spend the 20k between now and then... and will have the cash from the sale of the current property to put down later.

[Vertnut]

There's a lot of factors involved in this decision. What's the house worth now? Is it "liveable"? If you spend $20k, will it look like you did in 7 years? Some things can be totally outdated in 7 years.

[SVT Lurch]

If he does not have mortgage insurance it will not save him any money.

[2165 Turbo Rail]

putting the 20k toward principle now will save him money... but with out knowing the balance, length of loan left and interest rate there is no way of knowing how up....

if you put the 20k on your principle it could get your below the 80% mark (If you aren't already below that 80% ) on your current loan which then you could drop the PMI and save a little monthly

If he does not have mortgage insurance it will not save him any money.

[SVT Lurch]

I saw that, but you said this first without qualifying it with the mortgage insurance reference. I want to be sure you and he (and anyone else reading this) know that simply paying down principal WILL NOT save you money.

putting the 20k toward principle now will save him money...

[AdamLX]

Depends where you live and the age of your 'hood.

Personally I would update the kitchen (not a $20K update) and just put the extra cash in some sort of CD or high interest account that you can touch in 5 years.