HVAC SYSTEM. TO REPLACE OR NOT.

I have the opportunity to refinance my house at 2.5% fixed. By doing so I will cut 2 years off my current mortgage and save about $100/month. I can also cash out with about $30K in hand if I so choose with the same savings. Our house is about 17 years old and we plan on being here another 10 years till we retire. That said most likely sometime over the next 10 years the roof, HVAC system and a couple other items will need replacing as they are all original. I have the money to replace these if needed but I'm earning way more than 2.5% on it.
Roof is a 20 year so that's a no brainers. But what about the HVAC system? It's a Trane 3.5 ton 10 seer, Gas furnace. Its been bulletproof only requiring regular maintenance and a freon top off once. At 17 years old and 10 seer with a metal vented gas furnace would you guy's replace it? If so what brand and seer would you use? I have a relative who said he would recommend replacing it with a 15 seer Rheem. He does HVAC for a living and said if he were installing it in his own house that's what he'd use. Thoughts?

 

In my opinion, if it’s not broken then don’t fix it. When it does break, just replace the components that’s broken if you can get them. I would only replace it if it’s more efficient and the added efficiency pays for itself.

 

My relative said he'd replace the system at his cost. Less than $4000 otd. New ac unit, air handler and gas furnace. Rheem 15 seer. By a online seer savings calculator I should save approximately $2200 over the next 10 years just on the ac 10 seer to 15. He said the new gas furnaces are so efficient they now use PVC type vent stacks because they reclaim heat so much more efficiently. So I guess probably half the seer savings. So financially were about $800 less to keep the old system. But that is if its problem free for 10 more years. Plus it may impact the resale value in 10 years. 10 y/o vs 27 y/o system.

 

It’s a no brainer if you ask me. Go for it. If your cousin’s in the business, check on their recommendation. Stick w a nationally known brand w a good warranty.

See if you can get rebates on top of it all. I got $500 back on a heat pump hot water heater we installed earlier this year

Also, could you PM me your financial strategy that you seem to be satisfied with . I’m not impressed with my RORs of late...

 

That Trane might have another 10 years in it, the new one you put in may be dead in 10 years. Hard to tell about stuff like that. Unless it is giving you reason to think it is going bad I'd let her run.

The roof is pretty predictable unless damaged by weather. I actually got lucky on my roof. I figured I had 5-7 years left at most a few years back. We had a tornado nearby that only resulted in high winds at my house that blew 2 shingles off.

I retrieved them and repaired it myself. But felt it would be a good idea to let my insurance company know about it. They sent someone out who told me I had hail damage from a previous storm that I didn't even know about. They paid full cost for a new roof.

 

If you know you will be selling, and your relative will still be in the business, I’d maybe wait.
The newer the roof and HVAC are, the better it looks to the buyer.

Although, that price is a good price.
If your relative is in need of work ( COVID has hurt a lot of people) you might go ahead.

 

Your right the Trane may have 10 more years on it. But I've had 2 different service reps tell me the the early 2000's Trane gas furnaces were cast and would usually start to crack around the 15-20 year mark. Plus you don't hear of many 25+ year old AC units. Those weighs heavily in my decision. Then you factor in the energy savings.

 

Just ran our numbers. Up 1.38% over the previous high on 2/20. Up 20.74% over the previous low on 3/20.

It could all tank again, so I'm doing a touch of re balancing / adjusting this AM to try and add some preservation of capital.

My strategy can be had. For a price. Just like every other internet financial blogger who 'predicted' something or claims 'do this today'.

 

While you have a 10 year plan, always keep in mind plans can change. You might find yourself selling in a year, or staying 15. Point is, don't treat 10 years as a fixed number. Life has a way of upending our plans sometimes.

On the AC your SEER savings are too long to be making a move immediately, just based on that, unless you are anticipating a bump in gas and electric prices of significance. If the system were to fail on the coldest or hottest week of the year, do you have a reasonable 'escape plan'? Family, hotel, etc. to stay comfortable/safe? If so, I'd suggest waiting a while. I'd even repair it IF the repair was a simple component and there were no indicators of other imminent failure. OTOH, any major issue, new unit. Sold a house last year with a 14 YO Trane air/air. Can't speak to the Rheem vs Trane issue. Although our new place is also Trane..........

Roof is a bit of a gamble. If you have no immediate issues, I'd also let that ride a while, and keep a close eye. That's something that can generally be moved on pretty fast. And using your 10 yr target, the newer the roof is, the better. On that sale my 30 yr roof was 19 and I had need of a valley repair. I did a new roof and removed sales barriers vs patching. (would not have been visible either)

Ask an insurance agent if there are requirements on roof age (not condition) now for them to write a policy for a new owner. In some places they won't do it if it's over 3/4 of the life. Just interesting for you to factor in.

You're doing well. Having a plan is where most folks fail!