I am Thinking of Getting a Pool - but how?

[Northside Rovers]

What should I do?

Finance a pool separately or get a home equity loan and roll it into my mortgage payments?

I am in year 2 of a 15 year mortgage. Mortgage payments of about $1100 a month - I don't pay escrow - I pay at year end.

I have about $100,000 equity. What is equity? The difference between what I owe from what I originally borrowed? Or what I owe and what the house is worth?

[Matt in the Hat]

What should I do?

Finance a pool separately or get a home equity loan and roll it into my mortgage payments?

I am in year 2 of a 15 year mortgage. Mortgage payments of about $1100 a month - I don't pay escrow - I pay at year end.

I have about $100,000 equity. What is equity? The difference between what I owe from what I originally borrowed? Or what I owe and what the house is worth?
Equity is the difference in appraised value vs. outstanding debt. If you have not had an appraisal recently then your equity is approximated based on a comparitive market analysis of the area.

I would get the home equity loan only if the pool increases the value of your home. This is not a guarantee. Start doing a comparative analysis of your own between similar properties with and without pools. If the ROI is less than the price of the pool then I would finance it seperately.

My $.02

[stopper4]

Equity is amount of money you'd payed towards the principal of the loan. (the amount you pay toward interest doesn't count)

Are you paying PMI? Close to getting out from under it?

Have you talked to a realtor about how much adding a pool will increase the value of your home?

Have you looked into thing like local laws or neighborhood restricve convenants governing what kind of pool you'd have to build, or what you'd have to build with it? Frequently, you're required to build substantial fences..............

[Matt in the Hat]

Equity is amount of money you'd payed towards the principal of the loan. (the amount you pay toward interest doesn't count)


Not true. If you bought a $180,000 home for cash you would have $180,000 in equity.

You are correct in terms of 100% financing and no appreciation of value.

[Sachin]

A home equity loan is a SECOND mortgage, not an extension on your first mortgage.

Like everyone else said, talk to a realtor to see how much a value a pool could add to your property. If you have a homeowners association, find out what covenants and restrictions cover a pool. Then call your county zoning board and find out what permits and other requirements you need to build the pool.

DO NOT SKIP THESE LAST TWO STEPS. You can mess with the CIA, you can mess with the FBI, but the three groups you don't mess with are the IRS, a homeowners association and the zoning board.

Then contact your insurance company to find out how much insurance you need. Most homeowner policies don't cover swimming pools.

Then finally, you can call around about getting one installed. I wouldn't do it unless you can either add value in excess of the cost of the pool, fences, etc. or you plan to live in house long enough (10-15 years) to fully amortize the cost.

Sachin

[Northside Rovers]

I haven't talked to anyone about getting a pool - I just assumed it would add value to the property - even if not dollar for dollar.

I don't think there are any governances on whether we can get one or not. We live in the unincorporated county. All houses have 6 foot wood privacy fences. I called several years ago when we had a deck put in and no one cared. Our neighborhood homeowners assoc. may be the weakest in the country. I have no idea what they do.

Our neighborhood is only 9 years old. There is only one house with a pool within a half-mile radius that I know of. But a realtor lives across the street, so maybe I will ask her.

I guess my main question was whether or not there is much benefit beyond interest rates between getting a home equity loan and financing it separately.

[Danks81]

I haven't talked to anyone about getting a pool - I just assumed it would add value to the property - even if not dollar for dollar.
I wouldn't be so sure. To my knowledge, pools are amongst the most common item homeowners regret installing as well as a top item that new homeowners seek to have removed. If you are set on getting a pool, that's great, but really do your homework on this one.

[Own Goal Hat-Trick]

my parents built a pool at thier last place.

they were told that it would not add value to the house itself. so, theorhetically, if the house is valued at 200k, and you build a pool, it should still be at 200k.

least from what ive been made to understand.

would it make it more desireable? yeah, sure, but valueable, no. (but you could easially turn desire into money...)

[Ian Lozada]

I haven't talked to anyone about getting a pool - I just assumed it would add value to the property - even if not dollar for dollar.


Not exactly. An inground pool adds value to the property, while above ground ones, from most realtor surveys I've seen, lower the value of the property.

[Sachin]

But Patrick Ewing guaranteed my house would go up in value.

:D

Sachin

[firstshirt]

if your going to finance, chances are the equity loan is the way to go, probably get a better rate than financing thru the pool builder or taking a personal loan

[VFish]

Not exactly. An inground pool adds value to the property, while above ground ones, from most realtor surveys I've seen, lower the value of the property.Word of advise, I wouldn't assume an inground pool adds value and it might make you home harder to sell.

[Footer Phooter]

Not exactly. An inground pool adds value to the property, while above ground ones, from most realtor surveys I've seen, lower the value of the property.


That's becuase above ground pools are "trailer".

Northside, please tell me you're thinking in ground.

[Northside Rovers]

In Ground. Absolutely.

A Cement Pond.

We're not dead set on it - but we are looking around and pricing things.

[Footer Phooter]

In Ground. Absolutely.

A Cement Pond.

We're not dead set on it - but we are looking around and pricing things.


Then enjoy your pool. Just make sure you know how much it will cost you to maintain/fill the thing. (In terms of $$ and time).

[dj43]

My step-son just added a pool to their home. He spent quite a bit of time researching it. They live in a newly developed area with a lot of growth and new families with children.

A local realtor advised that the decision to add a pool should be made on the basis of whether you would enjoy the pool and can afford to have it built, not on any future added value. While some prospective buyers will like the pool, others will find it a negative. She also advised it is rare that an owner will get dollar-for-dollar return on the addition of a pool. Of course, all of this is based on the idea that something is only worth what someone else is willing to pay for it. Hence, if you don't have a crystal ball, don't assume anything. IOW, it is a crapshoot as to future value.

As to the best way to finance it; talk to your accountant but you want to be able to deduct the interest from your tax bill in any case.

Do a thorough job investigating costs of mainenance as well as the added liability insurance a pool will add in your area. Insurance and liability costs are a hidden tiger in some areas. For example, my step-son is required to have a separate fence around the pool itself, which is inside the kind of "good neighbor" fencing you describe. The fence wound up costing another $1,200 because of the local regs.

Finally, as is always the case around here, talk to the experts in YOUR area, don't take our/my word for anything. :)

[TheWakeUpBomb]

What should I do?

Finance a pool separately or get a home equity loan and roll it into my mortgage payments?

I am in year 2 of a 15 year mortgage. Mortgage payments of about $1100 a month - I don't pay escrow - I pay at year end.

I have about $100,000 equity. What is equity? The difference between what I owe from what I originally borrowed? Or what I owe and what the house is worth?If you wanted to roll it into your first mortgage payment, you would have to do a refinance and get cash out, which is tricky in Texas. They have some very strange rules about refis and cash-outs.

A home equity line of credit (HELOC) is fine. It lets you draw what you want, and you only pay on what you use. For example, you could open a $100,000 home equity line, but you'd only pay interest on the $20,000 (or whatever) that you used to build the pool. However, I'd recommend opening a HELOC for less than the existing equity of your home, because generally the rate will be better.

The rates on HELOC are tied to prime (Prime + .5, Primte + 1, etc.), so if the prime rate goes up, then your payments will go up. If you are worried about that, certain HELOCs will allow you to fix portions of outstanding balance as you go - normally in increments of $5,000.

Additionally, most home equity lines are interest only during the draw period (the first 10 years), before switching to an amortization schedule (20 years). Make sure that the HELOC you choose allows you to pay towards principal without penalty, and avoid HELOCs with prepayment penalties. Assuming your credit is good, there are options like that available to you, no matter what anyone tells you. One caveat: certain HELOCs that do not charge any closing costs (yes, they exist, too) will charge you the hard costs that they covered if you close the line within 3 years.

Most HELOCs have an annual fee of anywhere from $20 to $60 after the first 12 months.

Lastly, make sure no charges you over $1,000 in hard closing costs on one of these.

[GoldFinger]

Northside....don't listen to Yanks about the value of a pool. Sure in Delaware a pool might not add value to your house. But here in Texas, it does add value but might limit your market when selling the house.

With a Home Equity loan you would most likely be able to deduct the interest on your taxes. The risk with a home equity loan is that it is a lien on your house. So if you can't pay, you're house is at risk.

Let me know how it goes. I'm thinking of doing the same, but I don't have the equity that you do.

[Northside Rovers]

Yeah I think we're going to go ahead and do it.

I am not overly concerned with re-sale value.

We're not planning on moving for a while...and I've got 2 boys, age 7 and 3 and besides Star Wars, all they keep asking for is to go swimming. I grew up with a pool in Dallas and I know its a cool deal.

My neighbors will hate the construction for a while - but that's okay, I hate them.

We're going to get some quotes soon.

[Sachin]

Well, if you hate your neighbors, you know what that means: Viewing parties.

Sachin