Author Topic: HELOC For Primary Residence Upgrade?  (Read 287 times)


  • 5 O'Clock Shadow
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HELOC For Primary Residence Upgrade?
« on: May 13, 2019, 03:34:52 PM »
I'm curious to get the MMM thought on if it makes sense to take out a HELOC (or something similar) on my house to make some key upgrades that I believe would also improve the value of my primary home. A few details on my situation:

- Currently have some student loan debt, but aggressively paying it off while also investing, should be debt free in about 2 years
- I bought the home about 8 months ago, so I only have about $7k in equity (if you use the price at time of purchase, according to Zillow it's gone up another $15k in value, but not sure how accurate that is)
- The main area in need of updating is the kitchen - It's 50 years old and the cabinets are heavily sagging in some areas (particularly under the sink)
- I have no intention of moving any time soon, so I'll be here at LEAST another 5 years.

My thought is that it would be a net positive to increase the house value and I'd like to actually enjoy the update while I still live there. But I want to make sure it makes sense financially to do something like this.

Any thoughts/feedback is appreciated, and let me know if more information is needed to provide good advice, I'm new to this whole thing!


  • Stubble
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Re: HELOC For Primary Residence Upgrade?
« Reply #1 on: May 13, 2019, 04:58:58 PM »
You need a face punch!!! You are surely kroozin for a bruisin (see what I did there?)

I don't think anyone on the MMM forums will tell you to borrow money from your house while you have debt, and while you are only $7K from being underwater.

Nah! Get out of debt, and then pay for a kitchen update with the money that you have. Borrowing money is a suckers game.

(Maybe someone in the DPYM club can comment, I'm not sure how they feel about HELOCS)


  • Handlebar Stache
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Re: HELOC For Primary Residence Upgrade?
« Reply #2 on: May 13, 2019, 08:43:09 PM »
Most home updates do not make strict financial sense.  That is, they usually cost more than they add value.   There are some exceptions and it is dependent on the local market, blah, blah, blah.  Borrowing the money makes the upgrades more expensive, so they make even less sense financially. 

That said, things like kitchen upgrades are a lifestyle choice.  So that's up to you to answer if it makes sense in that regard.   

Another Reader

  • Magnum Stache
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Re: HELOC For Primary Residence Upgrade?
« Reply #3 on: May 13, 2019, 08:50:15 PM »
You can't get a HELOC, because the loan requires you to have substantial equity.  You don't have that.

This is not a good idea anyway.  Find a way to make the kitchen work until you have paid off your other debt and can afford to cash flow the repairs and upgrades.  If there is damage from a water leak that's causing the sagging, fix the leak and shore up the cabinets.


  • Handlebar Stache
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Re: HELOC For Primary Residence Upgrade?
« Reply #4 on: May 13, 2019, 08:59:06 PM »
Are the cabinets sagging due to the floor, or the countertop is sagging? If it's the floor you may have a joist that is rotting or foundation breakdown that needs assessment. Hopefully the inspector would've caught that...

Otherwise, the countertop could be reinforced with 2x4s and plywood.

Just some thoughts on how to cheaply repair it.


  • 5 O'Clock Shadow
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Re: HELOC For Primary Residence Upgrade?
« Reply #5 on: May 15, 2019, 11:54:49 AM »
I dug into this a bit more and I'm not surprised at the reactions, it just doesn't seem to make financial sense. I've attached a picture of the counter sagging I mentioned, but although it's annoying it hasn't really had that big of a functional effect on anything so I'll probably just leave it be for now.

The funny thing is comparing responses between groups. I asked a family member for her opinion and the response was, "You're young and have plenty of years to invest, investing in your house in the short term is very good too". A year ago I probably would have just blindly listened to that advice :)

The thought process originally was, "if it adds value and I'm going to do it eventually, I might as well be able to enjoy it while I'm living here", but it doesn't seem to add enough value to make up for it anyway. I'll just keep staying the path, thank you for the advice!