Cottage Finances: The Good, The Bad & The Ugly

With regards to the last post about the yardtacular cottage, I did some digging.

The Good:

• 100% financing may still be available. The realtor said that it still an option, though in this quickly changing market I'm not sure it will be available in a few months.


• There is legislation in the house for the maximum home value for a conventional home to be raised from $417k to $625-730k. Currently jumbo mortgage rates are about 1.4% higher than conventional loans, resulting in about a $400/month payment difference on a $500k loan.


• My realtor called yesterday to randomly check in. I will take this coincidence to mean that the cottage is my destiny... He also told me that is a buyer's market. Shocking.


• There is talk of further rate cuts

The Bad:

• Leigh's owns a home. As mentioned before, it is a buyer's market.


• I own a home. As mentioned doubly before, it is a buyer's market.


• My home is not yet done, so even with wanting cottage, I couldn't sell mine for what it's worth as it is a construction zone.


• I'm out of money to pay for renovations. I need more to pay for the last round of renovations even if I just wanted to put it up for sale.


• Once the house is done, houses aren't selling quickly


• Refinancing now will just cost me extra money, and will delay my timeline as the first floor will have to be immaculate before the appraiser comes in the house.


• I need money. Short term credit card debt may be an option, if only for a few months. Even if the cottage sells while I have gone into CC debt, I can just refinance the house after renovations, which will give an even higher appraisal value. The money pulled back out of the house would pay the CC debt and could go toward a new house.


• Someone could buy the cottage while I'm renovating. :(

The Ugly:

It's time to double down on sweat equity on the house and limit the spending to what needs to be done. For now, that means trying to get the downstairs done as much as possible. Once the money situation is settled upon, the order of renovations will vary drastically. If I don't refinance, I can move quicker, limiting the risk of the cottage selling and my number of mortgage payments. If I do refi, it means a longer timeline due to waiting for money.

Sorry for no pictures - hopefully I can post some later tonight. There is an especially cute one of Kitty McPaintface, which is Cat's name when she tries to 'help' us paint.