When the Feds dropped the prime a couple of months ago, my husband and I decided to refinance our home in Rochester Hills. Our 5-year ARM was maturing in September.
We never planned to refinance this home. In fact, I believe the phrase “if we’re still living here in 5 years, I’m going to shoot myself” was voiced when we chose the 5-year plan in 2003. Our Christian Hills abode was far from our dream home. We had only been living there two years at that point and had already dumped a ton of money on various repairs and issues. We had unknowingly bought a “handyman’s special”. There were two major problems with that scenario: a) the home inspector failed to alert us to many of the glaring money-sucking issues (but that’s a whole other post!); and b) no handyman lives here.
With a 2008 resale in mind, we embarked on renovations. Big stuff. Expensive stuff.
We finished the basement. . . twice. Apparently our basement has a propensity to flood, whether it be from a leak in the wall, a water heater past it’s prime, a bad sump pump or a frozen sump pump discharge. Two sets of walls and two rounds of new flooring later, our basement is fabulous. We replaced the painted-shut windows on the main floor and had a doorwall installed where there was once a window. We installed a new roof, custom patio with new landscaping, hardwood floors throughout, a new driveway, and new cabinets and granite in a bathroom. We completely overhauled the front landscaping and had major tree work done. Every room in the house has been repainted, some more than once.
Conscious of the steadily falling home values in Oakland County, we anxiously awaited the results of our bank-ordered property appraisal. Our money pit appraised for $50,000 less than it did 5 years ago, and $10,000 less that when we bought it 7 years ago. Aaaaack!
Our loan officer told us we were actually quite lucky, as some homes were appraising for almost 50% less than their prior purchase prices. Our outlook changed immediately upon hearing that, and we realized that all of our upgrades helped to hold our property value as steady as possible in this housing climate. We consider ourselves fortunate that since we had over 35% equity in the house, our payment only increased $90 per month. As foreclosures abound, we know that the majority of those with maturing ARMs can’t count on that.
So, we’re once again the proud owners of a 1966-built colonial in one of the more desirable subdivisions in the city. We continue our quest to bring the house into the new millenium and have several more projects on the horizon. Big ones. Expensive ones.
When the real estate market rebounds and our youngest is off to college, we’ll be ready!
Go Red Wings!
Thanks for a great season Pistons!