My husband and I are doing a substantial remodel to an 800 sq ft house that is to be our family's long term home. Here's the situation:
Owe approximately $215,000
Have approximately $165,000 ear marked for the remodel
Budget looks like realistically it's going to go $75,000 over budget
Anticipated value at end of project is $750,000 (we live in an expensive area of Seattle)
We have 3 options:
1) Cut back on what we want to do. Some of this would be stuff we could upgrade later (for instance appliances, counters, carpet, solar panels, etc.) and some of it would be stuff that would be more difficult to do later (hydronic heating) or really costly to do later (windows).
2) Obtain a construction loan, and bring our total debt in the property close to $300,000.
3) Reduce retirement contributions and try to come up with the extra cash on our own (we literally just switched my husband's 401K to max out for the year, and I'm planning on contributing another $40K-$50K to a Solo-401K and our Roths at the end of the year. We could direct this money to the house instead and come up with the small remainder.)
So, Mustachians, what do you think we should do?