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I have a pretty good savings but am faced with a roof replacement that's expected to run around $7,000.
I'm thinking about taking out some sort of home improvement loan while I'm still in the home as legit 'primary residence' and then once I get moved and and this house sold, pay off that loan. The alternative approach is to use the savings but have $7,000 less as a down payment and knowing many of the lenders want 20% down, I'm nervous about letting loose of any savings to get the roof done.
Need more details but do you need $7k for the roof, if its that bad it needs immediate replacement I would push for sellers to cover at least half if not all of a roof replacement. A serviceable roof should be bare minimum expectations for any house I would buy or at least would want a credit from the seller to cover part of it.
Need more details but do you need $7k for the roof, if its that bad it needs immediate replacement I would push for sellers to cover at least half if not all of a roof replacement. A serviceable roof should be bare minimum expectations for any house I would buy or at least would want a credit from the seller to cover part of it.
He IS the seller. He's trying to decide of he should pay for the roof from his cash savings, or take a home equity loan to pay for it, and pay that off as soon as the sale is complete.
I happen to think you want to do what you can to put 20% down on whatever you decide to buy. Have you talked to a lender about the different costs of the money in those scenarios? If repairing the roof will cut into that, and therefore increase the cost of borrowing for the new house, I would look at the home equity loan.
If the house is already on the market, you probably cannot take a home equity loan, so you want to look into that option before you list it.
I
I'm thinking about taking out some sort of home improvement loan while I'm still in the home as legit
'primary residence' and then once I get moved and this house sold, pay off that loan.
For X years now you've been putting off the roof job for a series of different reasons.
But all of them are about postponing the actual spending of *your* cash.
The chicken has come home to roost
Quote:
The alternative approach is to use the savings but have $7,000 less as a down payment
You're gonna have to take it on the chin.
Maybe even rent somewhere cheap for a year or two until you can save up enough to buy again.
Of course you could just fix your roof (and the other needed things)...
and then enjoy the repairs & improvements for a few years as you save up to sell later on.
Last edited by MrRational; 05-27-2013 at 04:43 PM..
If you have the equity, take the loan; you're right that the savings will be more valuable as a down payment than in avoiding interest payments (especially given current rates).
See if the contractor offers a zero interest loan/credit for X years. So long as you pay the amount owed when due, you have no interest. Hopefully you can pay off the roof without dipping into your funds. If you’re selling and are still in the zero interest period, just pay the amount in full when the house sells.
The 203B loan is for a house you are going to buy, not for one you already own.
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