Question:

What would you chose? remodel a house or pay down the mortdage?

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I am currently in the process of buying a house, and have limited money to spend for extras.

After my mortgage is paid (around $900) and all my bills and living expenses i get an extra $600 a month with nothing attached to it.

I want to slowly remodel the house,

i.e. put hardwood floor in, redo the kitchen, redo the bathroom, but i also know how much interest you get charged especially if you are new in the loan

What would you suggest i do (pay more on the mortgage or upgrade the house) and why?

Thanks for your suggestions!

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  1. if you just bought the house, live in it a while before changing anything, just to make sure the changes you make truly meet the needs of your specific lifestyle in that specific house.

    we bought a house seven years ago, and have just started remodeling.  don't get me wrong, we put our style into it, but waited to do all the major work.  one reason is we let equity build, which helped us when we needed it.  as our incomes grew, our mortgage seemed very small, which gave us the freedom to pay cash for major work by waiting so long.  we've done over $100,000 worth of work, but will only mortgage $60,000 of it.  when you add the origional purchase price of the house (7 years ago before the real estate boom in phoenix), a small consolidation loan a couple years back, and this construction loan, we'll end construction with $80,000 or so of equity.  our mortgage will be substantially less than comparable homes in our area.  

    be patient, and paying more on mortgage is never a bad idea, if you can afford it.  however, that extra $600 a month will go somewhere real fast.  good luck.

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