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Buying Vs. Remodeling
BUYING VS. REMODELING WORKSHEET
Conceived and Compiled by Gary E. Naulge Sr. Copyright 1988
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Sell Existing Home And Purchase Another |
Example |
Your Home |
1 |
Current Value |
75,000 |
|
2 |
Less: Existing Loan |
44,700 |
|
3 |
Current Equity (line 1 minus line 2) |
30,300 |
|
4 |
Less: Real Estate Commission on Existing Home
usually 6% of selling price |
4,500 |
|
5 |
Less: Closing Costs on Existing Home
usually 1% of selling price |
800 |
|
6 |
Less: Personal Property Moving Costs
usually $2,000 to $2,500 |
2,000 |
|
7 |
Less: Misc. Costs - drapes, phone install, furniture to fit, upgraded items, etc. |
3,000 |
|
8 |
Less: Closing Costs on New Home
usually 1.5% of new home |
2,000 |
|
9 |
Net Equity Avail. for Down Payment (line 3 minus lines 4, 5, 6, 7, 8) |
18,000 |
|
10 |
Cost of New Home |
100,000 |
|
11 |
Less: Down Payment (line 9) |
18,000 |
|
12 |
New Mortgage Loan Amount (line 10 minus line 11) |
82,000 |
|
13 |
NEW MONTHLY PAYMENT FOR 30 YEARS AT 7%
PI - (6.65 per 1000) + TI -(cost of New Home x .0013) |
675 |
|
14 |
TOTAL EQUITY IN NEW HOME |
18,000 |
|
15 |
Less: Additional Considerations |
|
|
16 |
Misc Lost or Replacement Values - fences, built-ins,
interior or exterior features, garden, landscaping, etc |
3,500 |
|
17 |
Perceived Values - neighbors, mature trees, unique
neighborhood, schools, etc. |
1,500 |
|
18 |
REASONABLE EQUITY (line 14 minus lines 16 & 17) |
13,000 |
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BUYING VS. REMODELING
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Remodel Existing Home |
Example |
Your Home |
1 |
Current Value |
75,000 |
|
2 |
Plus: Adjusted Value of Remodeling
Remodeling Costs x % (See Below) |
16,750
|
|
3 |
REMODELED VALUE OF EXISTING HOME |
91,750 |
|
4 |
Less: Loans (existing and remodel cost) |
69,700 |
|
5 |
TOTAL EQUITY IN REMODELED HOME |
22,050 |
|
6 |
Plus or Minus Additional Considerations |
0 |
|
7 |
REASONABLE EQUITY |
22,050 |
|
8 |
Monthly Payment on Remodeling Loan
9% for 15 years PI - (10.15 per 1000) |
255
|
|
9 |
Monthly payment on Existing Loan |
465 |
|
10 |
Monthly Payment on Refinancing Home w/Remodeling Costs
7% for 30 years (existing loan & remodel costs)
PI - (6.65 per 1000) + TI (New Value x .0013) |
585
|
|
11 |
Closing Costs on Refinancing
1.5% of new loan |
1,050
|
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SUMMARY COMPARISON
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Sell Existing
and Purchase
Another |
Remodel
With Equity
Loan |
Remodel
With
Refinancing |
Example Home |
|
|
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Reasonable Equity |
13,000 |
22,050 |
21,000 |
Monthly Payment |
675 |
720 |
585 |
Years to Payoff |
30 |
15 / 15 |
30 |
Your Home |
|
|
|
Reasonable Equity |
|
|
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Monthly Payment |
|
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Years to Payoff |
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REMODELING VALUE ADJUSTMENT (%)
Average Value of Remodeling in West North Central Region of the United States
in 2007 according to Remodeling Magazines 2007 Cost vs Value Report.
Attic Bedroom Remodel |
65.8% |
Master Suite Addition |
57.9% |
Back-up Power Generator |
50.7% |
Minor Kitchen Remodel |
74.2% |
Basement Remodel |
65.1% |
Roofing Replacement |
56.2% |
Bathroom Addiction |
56.4% |
Siding Replacement |
77.1% |
Bathroom Remodel |
68.6% |
Sunroom Addition |
54.3% |
Deck Addition |
75.2% |
Two- Story Addition |
65.3% |
Family Room Addition |
57.3% |
Window Replacement (Vinyl) |
73.3% |
Garage Addition |
57.9% |
Window Replacement (Wood) |
71.0% |
Home Office Remodel |
48.1% |
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Major Kitchen Remodel |
69.5% |
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