Author Topic: HELOC, Personal Loan? Other? Finish this house!  (Read 2225 times)

fixie

  • Stubble
  • **
  • Posts: 146
HELOC, Personal Loan? Other? Finish this house!
« on: July 05, 2018, 01:51:55 PM »
Greetings friends,

I have been renovating my house slowly for the last 8 years and have only a little bit left to do...However I'm super burned out and tired of spending most of my free time polishing this turd.  I am considering a HELOC or other option to just pay for the materials and labor for the major stuff and bang it out quickly.  Estimate for the total spend is ~$25k, excellent credit, 24% Loan to Value Ratio, 1 credit card paid off monthly.  Plan would be to use most of this money within about 6 months, then pay the entire thing off within about 2 years(probably a combination of lump sum payments and smaller amounts), sell the home within about 3-5 years.  Requesting some wisdom from Moustachians on lowest monthly cost options given the loan amount is small and the term is rather short.  On initial investigation, it seems a HELOC might be best, but if you know of other options to investigate hit me!

Many thanks, -fixie

tweezers

  • Stubble
  • **
  • Posts: 232
Re: HELOC, Personal Loan? Other? Finish this house!
« Reply #1 on: July 05, 2018, 02:23:10 PM »
Open a credit card with a long interest-free period.  We have done this for all remodels either by using the balance transfer checks (if no balance transfer fee) and/or by loading all our spending onto that card, and using the cash that we're not applying to paying the card in full towards paying contractors.  We pay the minimum balance and save during the 18- to 24-month interest-free period, and pay the card in full before the balance is due.  If we don't quite get there before the interest-free period ends (not happened yet), we can use the line of credit for the difference.  Interest-free loan for the win!

fixie

  • Stubble
  • **
  • Posts: 146
Re: HELOC, Personal Loan? Other? Finish this house!
« Reply #2 on: July 05, 2018, 02:35:24 PM »
Open a credit card with a long interest-free period.  We have done this for all remodels either by using the balance transfer checks (if no balance transfer fee) and/or by loading all our spending onto that card, and using the cash that we're not applying to paying the card in full towards paying contractors.  We pay the minimum balance and save during the 18- to 24-month interest-free period, and pay the card in full before the balance is due.  If we don't quite get there before the interest-free period ends (not happened yet), we can use the line of credit for the difference.  Interest-free loan for the win!

Aaaah, clever!  So if I am understanding you correctly:  If, at the end of the interest free period you haven't paid it off, you use $$ from a HELOC?  Thank you for this information...
-fixie

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1686
Re: HELOC, Personal Loan? Other? Finish this house!
« Reply #3 on: July 06, 2018, 07:01:09 AM »
Open a credit card with a long interest-free period.  We have done this for all remodels either by using the balance transfer checks (if no balance transfer fee) and/or by loading all our spending onto that card, and using the cash that we're not applying to paying the card in full towards paying contractors.  We pay the minimum balance and save during the 18- to 24-month interest-free period, and pay the card in full before the balance is due.  If we don't quite get there before the interest-free period ends (not happened yet), we can use the line of credit for the difference.  Interest-free loan for the win!

+1

For only 25K and a quick payoff, it's not worth the cost and hassle of getting a Heloc.  Just juggle credit cards with extended 0% interest. 

Of course, the best would be just "pay as you go" in cash...

tweezers

  • Stubble
  • **
  • Posts: 232
Re: HELOC, Personal Loan? Other? Finish this house!
« Reply #4 on: July 06, 2018, 01:08:56 PM »
Open a credit card with a long interest-free period.  We have done this for all remodels either by using the balance transfer checks (if no balance transfer fee) and/or by loading all our spending onto that card, and using the cash that we're not applying to paying the card in full towards paying contractors.  We pay the minimum balance and save during the 18- to 24-month interest-free period, and pay the card in full before the balance is due.  If we don't quite get there before the interest-free period ends (not happened yet), we can use the line of credit for the difference.  Interest-free loan for the win!

Aaaah, clever!  So if I am understanding you correctly:  If, at the end of the interest free period you haven't paid it off, you use $$ from a HELOC?  Thank you for this information...
-fixie

Basically, yes, although we have an unsecured line of credit (not a HELOC).  If we ever got to the point where we needed to pay off a credit card whose interest-free period was ending and we didn't have the funds, we'd draw from that line of credit.  The interest rate on that is higher than a HELOC (but way less than credit card rate), but the hassle is much less, and we've not had to use it because we've been able to juggle zero-interest cards successfully.  If you can manage that, its definitely the way to go for cheap money. 

snogirl

  • Bristles
  • ***
  • Posts: 364
Re: HELOC, Personal Loan? Other? Finish this house!
« Reply #5 on: July 06, 2018, 02:29:01 PM »
How's the market in your area? Red hot? I was in a similar situation needing 25k to finish polishing my turd after 5 years. Decided to take advantage of a red hot market sold as is and bought a turn key cape in a LCOL area and fire'd. Just an idea. Otherwise I'd go with the 0% cc suggestions given.

Sent from my Moto G (5) Plus using Tapatalk


Papa bear

  • Handlebar Stache
  • *****
  • Posts: 1838
  • Location: Ohio
Re: HELOC, Personal Loan? Other? Finish this house!
« Reply #6 on: July 06, 2018, 04:23:02 PM »
You can call your current CC companies to see if they will offer you 0% going forward too. You might not need to get anything new.


Sent from my iPhone using Tapatalk

fixie

  • Stubble
  • **
  • Posts: 146
Re: HELOC, Personal Loan? Other? Finish this house!
« Reply #7 on: July 06, 2018, 04:55:23 PM »
How's the market in your area? Red hot? I was in a similar situation needing 25k to finish polishing my turd after 5 years. Decided to take advantage of a red hot market sold as is and bought a turn key cape in a LCOL area and fire'd. Just an idea. Otherwise I'd go with the 0% cc suggestions given.

Sent from my Moto G (5) Plus using Tapatalk

It's crazy(like the value has more than tripled in 8 years and prpjected growth in 1 year is another 9%), and if I just finish the drywall in the basement, new front door, finish up a bathroom project and a bit of flooring it will sell for much more.  Some of the work I still enjoy...it's things like drywall and tiling the floor I can't stand anymore.
Thanks everybody for the suggestions!  I'm looking into it now...
-fixie