Author Topic: How to pay for a home renovation - investments or home equity loan?  (Read 1304 times)

BayAreaFrugal

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How would you pay for a $20k home renovation project? Liquidate stock investments (VTSAX) or get a home equity loan?

gardeningandgreen

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Re: How to pay for a home renovation - investments or home equity loan?
« Reply #1 on: July 12, 2017, 12:13:07 PM »
It would depend on how much closing costs would be on the home equity loan and how soon you plan on doing renovations.

We are currently doing about $10000 of renovations ourselves on our house and we are using a 0% interest rewards credit card and using cashflow to pay it off. This way we are paying no interest and our money says in the stock market. Yes it means that less is going in but theres no taxes to pay on money going out and we don't have to wait for the home equity loan to come through.

tweezers

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Re: How to pay for a home renovation - investments or home equity loan?
« Reply #2 on: July 12, 2017, 12:31:11 PM »
It would depend on how much closing costs would be on the home equity loan and how soon you plan on doing renovations.

We are currently doing about $10000 of renovations ourselves on our house and we are using a 0% interest rewards credit card and using cashflow to pay it off. This way we are paying no interest and our money says in the stock market. Yes it means that less is going in but theres no taxes to pay on money going out and we don't have to wait for the home equity loan to come through.

We did this to pay for ~$30K of a garage build: put all household expenses on a zero interest card (spread over three; interest-free period between 18-24 months) and used our income that would have otherwise gone to paying the monthly balance due to pay contractors.  The garage is built and we've nearly saved the amount needed to cover the balance remaining on the cards when the interest-free period ends.  Paying zero interest on a $30K loan plus the credit card rewards....win!

BayAreaFrugal

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Re: How to pay for a home renovation - investments or home equity loan?
« Reply #3 on: July 12, 2017, 01:06:06 PM »
Oh I love this idea. I will have to look into it some more!