I would imagine that we wouldn’t qualify

I would imagine that we wouldn’t qualify because our debt to income ratio is high. What kind of loan are you thinking? I think we could get a loan through our credit union for about $15,000. I guess that would combine one car loan with our credit cards. That might work depending on the payment amount. Hmmm.

Yes, I can be that disciplined. Do you mean get a 10 or 15 year mortgage on our house? or get an additional mortgage to help pay off the debt?

Well, I don’t “need” to do these improvements, however I do have an uncle living in my unfinished basement.

I don’t see how it could cost me more than I can afford, if I’m already making those payments. I do understand it could be costly if for some reason we weren’t able to make the payments and the loan was tied to our house. We aren’t struggling to make the payments, I’m just sick of the debt and the interest we’re paying. We have considered just paying off the credit cards one at a time by paying extra on one account, then paying off the next, etc, etc. And then looking into getting a loan to finish the basement later on.

I just figured it would be beneficial to do it now since:

  1. We are already making pyaments of $xxx
  2. That money could go towards debt and the basement, which would make our house worth more
  3. We have someone living down there and it would be nice to at least finish the 1 bedroom and bathroom

It just made sense to me that if we’re already paying that amount and yet having nothing to show for it but debt, why not put that money into the basement? That would not only give us something to show for the money, but also we would gain that money back in the house.

All improvements to a house make it more valuable. But from a real estate sales perspective, there are certain types of home improvements that you can recover when selling a house and others that you don’t. Kitchen and bathroom remodels are the easiest costs to recover. Adding a new bedroom may or may not be recoverable. I don’t remember if it ranks high up in investments that you can recover.

By recoverable I mean that a future buyer may be willing to pay a premium for your house for certain things, but balk at other types of improvements. From personal experience, I inherited a house in which my parents enclosed a patio to and added a bathroom. When I sold it I was not able to recover the costs of improvements. My father shrug his shoulders and said the improvements were to get more enjoyment from the house. It sounds to me like you want to have your uncle enjoy the portion of the house in which he lives.

yes….and in 75-80% of the cases that’s what happens. It’s different in most peoples minds….The “bill” is only $185, so if I don’t pay the extra this month, it’s ok….then the next month, then the next month. But right now, your bills say – I owe $345 / month, and you know that’s what’s due.