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I just did the same thing that you are considering and close next week so this thread has been very interesting to me.

In 2002 I bought a house built in 1878 that hadn't been updated since 1878...well maybe 1950. I gutted it and rebuilt it mostly in 2002 when we were dual income no kids. 2002 almost killed me...ha ha. I finished it off over the last 9 years (and 3 kids) and had a ton of sweat equity in it. I don't ever want to leave it and I don't see many scenarios where I will be forced to. I just refinanced to a 30 year loan which added 9 years more than I had on the old loan and that can be ugly when you look at amortization schedules, I know. But tax advantages and compounding do wonderful things too. I got 4.25% because I rolled all closing costs and escrow into the loan. I stayed under 50% loan to value to make the loan process easy (less than 3 weeks which surprised me), get the best rate and to keep my payments just under 20% of my gross income.

I was very close to doing this in 2008 during the crash and didn't and I really regret not following through. Hindsight might bias that regret but I think it was pretty obvious at the time that I missed a twice in a lifetime opportunity. I don't see the current environment as opportunity laden as then but we are living in interesting times and opportunities might present themselves again.

I'm not going to try to persuade you one way or another but in my situation I felt very comfortable with the additional leverage. Whether 4-4.25% float is cheap is another matter altogether.

Best of luck to you whatever you decide.
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