Let's Talk Money

Or Stress.

Or Both.

When we bought the house, we received two competitive bids for foundation replacement. They were both in the same range, price-wise -- let's call that x. We didn't have that kind of cash, so we had to wait until the house appreciated.

A year later we refinanced and got some money out of the house, but we had to put it toward painting; both our insurance company and appraisers were giving us a hard time about the exterior. So we had the house painted. (There's another rant waiting to happen -- Ayse will fill you in on all of those details.)

Meanwhile, I was asking for new foundation replacement bids, just so we'd have an idea of how much money we'd need to borrow to finish the work. Yikes! Prices now were in the 1.2x to 1.8x range, depending on the contractor and feature set (e.g. basement or not). So we performed refinance two, aiming for the higher of those two amounts -- and got it.

As a short tangent, let me tell you how unhappy I am with banks. Twice now I've called up the banks who've held our various home equity lines and asked for more credit to be extended. I've gone through a 30-minute application and interview process over the phone. At the end of each of these interviews, they tell you you're approved for a certain amount. This makes you happy. When documents come in the mail a week later, you find out you're only approved for half of what they originally quoted you!

As another short tangent, let me tell you how happy I am with our mortgage broker. They listen to us, understand our goals, and try to find financing that meets our needs. Customer service -- what a concept! We'd recommend them highly to anyone. They're the Right Trac Financial Group. Ask for Carrie-Andrea Moresi or Jay Koppelman. Tell them that Ayse and Noel sent you.

Anyways, second refinance complete, we hired a structural engineer to draw up foundation plans for us. We asked three contractors for bids and got back two responses. Prices were now 2.3x or 2.5x! Some of that we expected, since our foundation plans are a bit overengineered (you can't be too careful in earthquake country), but a lot of that we didn't. Turns out that prices for concrete and steel have skyrocketed in the last year due to unprecedented growth in China and the Iraq war. It was clear that prices weren't going to get any cheaper, so we inked a contract.

As things stand, we've got a contract signed to replace the foundation as-is, fix some rot, and replace the natural gas line under the house. While it's going to be great when complete, it doesn't give us everything we want -- we'd really like a basement. Why? We have no "dirty" work space in the house, nor do we have a garage. How much would a basement cost? It drives the price up to 2.7x. That sounds like a lot, but compared with the cost of building a big shed in the backyard, it's pretty cheap.

Enter round three of fundraising. We've got to pull out all the stops now if we want this to happen. First, there's an extension to the equity line (hopefully). Second, there's selling some stuff around the house. Third, there's collecting judgments from our previous deadbeat landlords. Fourth, there's selling company stock (if it turns out to be worth anything). Fifth, there's borrowing against retirement savings. Sixth, there's praying for divine intervention.

This is all a lot more stressful because our contractor is at a decision point today about the basement. Since the shoring contractor (the person who will install the huge I-beams under the house to support it while the foundation is being replaced) is coming next Wednesday, we need to decide today whether or not the basement is going forward. If it is, deeper holes need to be dug for the cribbing (stacks of wood on which the I-beams rest) on Monday and Tuesday. If we dig the deep holes, we're committed to the basement, since holes of that diameter and depth "disturb" the soil; foundations need to be poured on "undisturbed" soil.

Do we gamble and assume that our loan will go through? Or do we say "no" now only to discover that the money would have been available some time next week? Ack.

posted by noel on 02/04/05

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