Ask Terry Questions Remodel or Tear down

Remodel or Tear down

By Terry Savage on February 20, 2023 | Housing / Real Estate

I am a new widow, live in a spot my kids and I love, Fontana, Wi. My house is 1890s and very dated. Over the last 35 years we have done remodeling but it really is a tear down. I have a yearly income of $62,000, $500,000 in retirement funds and $62,000 in a savings account. Should I use savings and retirement funds or take out a mortgage and tear the house down? Can I afford to tear my house down or should I continue to keep putting patches on things?

Terry Says

There might be a better, or at least different solution, and I urge you not to rush into anything.
Having done extensive remodeling on a Wisconsin house, I know just how expensive and time consuming either remodeling or building a new house can be. It might not be a project you want to take on at this stage of your life. But I certainly understand your love of lake living. So you could get a free estimate from a builder.

Here’s something to think about. You probably can’t get a mortgage at this stage of your life. If your income is just Social Security and a pension, it might be difficult to obtain a mortgage.

You know that if your house is a teardown, the land it self is still very valuable — especially if it is on the lake. And they are building some interesting condos on Lake Geneva, as well as senior living. Again, this is something you don’t want to rush into — but it’s worth investigating.

Finally, have you discussed this with your children? Could they contribute to the cost of either repairs or a new house — knowing they will inherit it one day?

I don’t know your relationship with your children, your age, your health situation — and how long you want to keep living alone. All of those will play a part in your decision. Take your time, and feel free to write back.



a personal
finance question