Greetings Mustachians,
I'm still doing my own maths on this question but thought I should run the idea past the wise ones here:
We recently experienced hail-damage on our nearly paid-off home. Insurance will replace the roof, siding on the garage, several windows on the home, along with some painting on the home's wood siding.
Current settlement, with deductible already applied, and 7-year depreciation is around $20k.
The kicker: Bank signed the check over to us, since payoff on the mortgage is around $13k. We agree to make all the necessary repairs which have to be done within 12 months to recover any additional insurance (i.e. the depreciation; we have 100% replacement policy).
Since we have 12 months to make all the repairs, I'm considering the idea of paying off the mortgage now, holding $7k to begin making the repairs, and paying ourselves the mortgage payment (around $750 / mo) over the next 12 months to build up the rest of the funds for the repairs.
I think the roof is going to cost between $10k and $12k, so we'll get the remainder of the settlement on the roof portion when that work is complete.
Since I'm growing a mustache I am open to doing the garage siding & windows myself, but not sure if that will gain us any additional settlement funds (depreciation) since I wouldn't be using a contractor and I'm guessing insurance isn't paying me for my own labor. (I will hire out the roof as this is a two-story turn of the century home with a scary pitch.)
We will make the repairs on the home, and won't take the money and run, but it looks like we could come out ahead with the proper use of sweat equity, frugality and cunning.
Any thoughts on this? I'm open to all sound advice and punches in the face.
Cheers,
Paul