Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Planning on replacing windows, doors and siding ($27k).
Should I try to stretch it and pay cash, but dipping into emergency fund or look at getting a Home Equity Line of Credit? Is the interest on a HELOC deductible?
Looking to get a feeling what people typically do.
I wouldn't raid your emergency fund to do needed home repairs. Assuming you have some equity on your home, using a HELOC makes more sense. Now if you had tons of cash on hand, that would be another matter, but emergency funds should be reserved for genuine emergencies. Better to preserve some liquidity.
Planning on replacing windows, doors and siding ($27k).
Should I try to stretch it and pay cash, but dipping into emergency fund or look at getting a Home Equity Line of Credit? Is the interest on a HELOC deductible?
Looking to get a feeling what people typically do.
We would pay cash. In fact, unless we got a package deal that was worth it, we would do the job in stages, paying as we go.
But we have plenty of cash, our home is paid for, and we have enough income to replace the money we borrowed from ourselves. I retired in 2010.
I just got an offer in the mail for a HELOC for around 1%, seems like a no brainer. Even at 3-4%, preserve your cash if you can pay it off in a reasonable amount of time (say under a year or two). At 3% your cash is getting 1% so your effective rate is 2%, hardly worth losing sleep over $500 in interest a year...
I just got an offer in the mail for a HELOC for around 1%, seems like a no brainer. Even at 3-4%, preserve your cash if you can pay it off in a reasonable amount of time (say under a year or two). At 3% your cash is getting 1% so your effective rate is 2%, hardly worth losing sleep over $500 in interest a year...
I would have to look around but sub 2%, and I wouldn't really have to think about it. Above 3% I am not so sure it is worth it. We could likely recover the cost within a year either way we go.
I like cash. But I do not know your history and how likely you are to need the emergency fund so I would lean toward financing at least part and paying as fast as I can. Keep all of your emergency fund as you never know what might happen.
My initial question is, do those items NEED to be replaced or is it all just wants? If they aren't needed, I would hold off until you have the cash to pay or do them in chunks. Get the windows now and the doors/siding later.
If these are true repairs that are needed as soon as possible, then I think the HELOC is the way to go.
I did all my remodeling out of cash flow. I was shoveling just about 100% of my disposable income at it for four years. In hindsight, I should have bought a more expensive house that didn't need all that work but I'd just been unemployed for 14 1/2 months and I liked the idea that I was doing it in phases and could stop at any time if something bad happened with my job.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
