Remodel/Repair - Financing a Contractor

[scootermcrad]

I could use a little advice here. I'll keep the questions general so they apply to the general garage topics as well.

We have a section of roof on our home that is considered "flat" (low pitched addition). It finally decided to give us problems after a bad storm a few weeks ago. We have been planning on changing this roof to a high-pitched gable roof since the day we purchased the house, but the problems came before we were ready and is too big of a job to do by myself. The roof "remodel" will be contracted out to the tune of $12k-$15k.

The question is, what type of loans/financing should I be looking at for a project like this? We are not mature enough in our mortgage to do an equity line of credit (which would be preferred), so we're going to have to look at other options.

Any suggestions out there? Links to good articles? Experiences? Things to watch out for?

Thanks for any help!

 

[My Old Tools]

Credit card. Personal loan at your credit union. Refinance a car. Sell a car. Sell a boat.....

 

[CNGsaves]

Assuming you have ability to repay . . . . COLLATERAL for loan will reduce rate.

Refi's on car loans would be pretty cheap at a Credit Union.
Loan against cash value of whole life insurance policy is another option.

However, both of these are . . after . . hitting up parents & in-laws for gift !!
Amount you need is just about limit for gift tax purposes for "free" money !!

 

[scootermcrad]

Thanks for the responses...

Credit cards are pretty high interest these days, and maxing them out isn't exactly good for your credit either, so that is not an option.

All my cars are paid for, so refinancing isn't an option (although I have done that once and actually worked in my favor when I traded the car in! )

Selling stuff and asking for money isn't really going to get me anywhere, since I don't have anything to really sell and my parents are retired. Being that home improvements are a pretty typical thing to gain equity in your home, I'm guessing there are some creative options out there for people who don't have equity that can be used from their home. Has anyone used a creative of loan or line of credit with a reasonable rate to get a project done?

Thought maybe this might be a decent topic, errrr... maybe not?

 

[My Old Tools]

I built my first building with a home improvement loan. The trick was, I didn't have a home yet. Banker still approved it, then rolled the land note and the home improvement note together at a lower interest rate when I was done. You never know until you ask. When I bought my land the interest rate was 6% for a lot and 12% for acreage. I was buying 11 acres. I told them it was a lot because we had a 10 acre minimum lot size in the neighborhood. Bank gave me the 6% rate. If you have the income and good credit, they can usually find a way.

 

[scootermcrad]

I built my first building with a home improvement loan. The trick was, I didn't have a home yet. Banker still approved it, then rolled the land note and the home improvement note together at a lower interest rate when I was done. You never know until you ask. When I bought my land the interest rate was 6% for a lot and 12% for acreage. I was buying 11 acres. I told them it was a lot because we had a 10 acre minimum lot size in the neighborhood. Bank gave me the 6% rate. If you have the income and good credit, they can usually find a way.

That's pretty interesting! Thanks for sharing that! 6% is about what I would expect as well.

 

[MrBalll]

May look into going to a credit union and get a loan with one, or two, of you vehicles as collateral.
I went and checked on that for my shop expenses and they would give me 150% of my trucks value.
May be something you can try.

 

[pablo94sc]

Thanks for the responses...

Credit cards are pretty high interest these days, and maxing them out isn't exactly good for your credit either, so that is not an option.

Has anyone used a creative of loan or line of credit with a reasonable rate to get a project done?

HELOCs are great if you have equity to borrow against, and they are fairly low interest because they are basically second mortgages. 5-6% should be pretty easy to get with good credit scores.

I think getting new credit card with a long term, 0% interest rate is the better option though. Chase Diamond is a 22 month, 0% interest card (MC I think) and my CU has a 21 month Visa version. That's almost two years to pay off, and if you aren't quite there, then a personal loan or a 0% balance transfer fee card with 12-15 months no interest could be gotten. Of course, this assumes you have excellent credit already and are good enough with your budgeting to pay it off that quickly.

 

[jd_1138]

Yeah probably the home improvement loan or the credit union route would be best. Credit union will probably just do it as a personal loan -- as ong as your credit's good.

 

[Angelfire]

Part of the equation depends on how quickly you can pay the borrowed amount off. If within 2 years, then the zero interest card may be the ticket. If longer, another option might be better. Personally I'd fix the roof as cheaply as possible then do the gable end when I had saved the cash.

 

[scootermcrad]

Thanks everyone! Great suggestions! Credit is pretty good, so I think I may have some options open to me.

Credit union is a GREAT suggestion! I will look into this!

Personally I'd fix the roof as cheaply as possible then do the gable end when I had saved the cash.

That's the painful part of our situation. The roof of topic is big enough and damaged enough that it's not going to cost us very much more to just do it right, do it once, be done, and enjoy our home. We talked with a few professionals about doing just the basics to get by, and the condition is just too bad. Full tear-off and restructure either way. Good 'ol home ownership!

 

[joe--h]

Post some pictures and you might get some advice as to what to do. Roofing is not rocket science, neither is framing.
Joe H

 

[GMBBS]

Look into refinancing one of your cars at a credit union to raise the capitol. My CU offers 1.9% on new and used car loans. Hard to beat that rate.

 

[K13]

Not sure how it works down there but up here I just used a line of credit interest rate was right around 3% and I think it has actually dropped to about 2.7% now. Of course now I have nothing on it.

 

[justanengineer]

The credit unions in this corner of the country are starting to advertise "vacation loans" on the radio again now that the weather is good. I'm sure if you want credit for anything (maybe even for credit), they'll find ways to lend it!

 

[PCustoms]

Home equity loan?