My husband and I are debating how to finance some home improvement projects. He says use savings, I say use a line of credit(repay within two years hopefully) I am afraid if we use savings we will never replace it. He doesn't want debt. Any opinions?
Should we wipe out savings or go with home equity line of credit to finance home improvements?
If you got the equity then go with the HELOC. If the home improvements are going to increase the value of your home then it's a no brainer. As long as you're not going to buy a car or take a vacation with it. Leave your savings alone.
...OR say you can get a HELOC @ 6% APR. Then the money in your savings account that you would have spent on your house - put that money in a CD (or some other investment vehicle) that earns 6% interest and then you're pretty much getting your home improvements for free. If you got 6% going out then see if you can get at least 6% coming in.... and then you'll make that much more when you sell the house because you didn't really pay much for the improvements.
Reply:ok your choice here is a simpel question go into debt or no if you have the money + $1000 for an emergency plan go with savings if not wait till you do have the money. or you take out the loan pay for the stuff you could of baught outright AND pay the bank for lending you money in other words you have 2 equations to choose from caust of improvments =caust of improvments or caust of improvments + intrest = loan
Reply:Neither of you are totally right in my book.
Without knowing your situation I can only speak in generalities, but this is what I do for a living.
Lines of credit are cheap..RIGHT NOW.
Savings are wonderful because we could crash and burn in this country..our largest banks are borrowing from Chinese, Middle East, European, and Japanese banks in record amounts to stay afloat, and some may become partially or totally foreign owned..it's that bad.
My suggestion, do a little of both..that way you'll be the happiest with each other, too !!!
Reply:Save up and pay cash. If you can't pay cash for your home improvements, then you can't afford it.
Reply:Neither. Never use all of your savings or borrow money for a luxury expense.
Save up the extra money and pay cash.
tanning
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