I think you're about on the right track, but we need to take a look at your home to give you a better idea. The online estimates are very very rough. In your neighborhood they could in fact be way off as Zillow and the like are sometimes using mortgage balances to determine values. As far as estimates to update, this is hard to tell and will depend on how extensive the foundation problems are. As to the last part of how much house can you afford? The one thing we are missing is your income and any other debts. I'd suggest a couple of places to start. One is to get prequalified with a lendor with the ideas you have discussed. This is a free service and if you need a recommendation, please feel free to contact me. Once you get that and decide you want to move forward we need to do a competitive market analysis on your home and perhaps get some estimates for repairs/updates and see if you want to move forward.
Good luck.... more