Home Renovation Project - How Do You Pay?

Let's say there is a renovation project in your home you would love to tackle . . . well not you personally, but hire a contractor to take care of. The budget for the project could run 8K to 10K. What would be your plan to pay for the project?

Use your savings/pay cash?
Dip into your 401k?
Take out a Home Equity Loan?
Take out a Home Equity Line of Credit?
Ask Freddy the Fence for a "loan"?

And what is the reasoning for your payment choice?

 

At this point in our lives (retired), it is cash, no other option viable. (OK, we might put it on a credit card and pay it off immediately, just for the miles.) If we couldn't pay cash, we wouldn't improve it. Our bathroom is done, the kitchen awaits for the next year or so when we will replace a couple of vacation trips with the remodeling.

 

Who is Freddy the Fence??

 

Agree 100%. Actually this has been the case for many years. If we do not have the money, we do not do it. Most of the renovations are done by us, but all the "stuff" still takes money.

We do use CC to pay the vendor, then pay it off next month.

 

I know this guy...

 

Checking or savings. (With as much as possible on a reward CC paid off 'fore those nasty interest charges hit.)

 

He is the cousin of No Nose Nunzio

As for paying for renovations, we just self finance out of cash or savings. I won’t do the project without the funds to do so and unless it’s an emergency, I don’t do home equity loans. I’m done writing big checks, in the past 5 years we replaced our HVAC system, driveway, roof, siding, windows, finished half of the basement (which required a costly basement egress), and just replaced the master bath.

 

credit card for points and then pay it immediately. If I did not have the available funds I would not do renovations. Unless of course it is mandatory like whole in the roof or water heater explodes.

 

Last year, we did a major renovation with a refinance. We'll not be staying here for the full term of the loan and this improved the marketability of the property. We may do the same thing with a Texas Veterans Land Board Home Improvement Loan (currently at 3.77%; 3.27% for 30% or greater VA disability) to fix some other major items. My thought is that we can enjoy the improvements now and they are all things that would likely be issues selling the house. It does give us less equity for now (that will depend on payments made and real estate values moving forward) but I'd rather enjoy improvements than pay for them in a lower sale price or fixes required immediately before we sell.

I did run all the home improvement bills to be paid from the refi through the credit card for the mileage where possible...got us to the Companion Pass by August...then paid it off...

 

We have another consideration at this point. The house next to us has flooded twice in the past 5 years. It is lower than our house by about a foot. Their slab also flooded when it was being built years ago.

I generally find that the drainage around here is not as good as it used to be and it seems to be getting worse as more concrete and houses are put in. All of those properties have to be built higher, which takes away from land that WAS lower until they were built. The drainage folks work on it, of course, but I just think the same type of storms flood more than they did 15 years ago when we bought the house. We run into problems when we get 10" or more in a couple of hours, which has happened at least four times in the past 10 years. The 28" we got in the last hurricane/tropical storm was spread out and we did not have much high water as the quick storms.

Anyway, the last time they flooded next door, water got higher than it ever had in our yard. It was bad enough that I double checked to make sure I had paid the flood insurance (not that I really could have done anything about ti at that point!).

That has us thinking about selling sooner than later...

 

We did about 25K in improvements a couple years ago and had 9 years left on the mortgage so we refinanced for ten years and took the cash out that way.

 

do Contractor's take a C/C ? We recently had our house repainted, along with the guy being a finish carpenter, we replaced all the door jams, fascia board, trim, door seals, etc by the same guy. It was about $10k. It was cash or check, he did not take credit cards

 

Straight cash Homey, hate paying interest.

 

Most contractors I have dealt with take CC, assuming they have an actual business and not some small thing out of their garage

 

Ca$h now.
Previously, LOC.

 

If we can't use money we have saved it does not get done. I agree with those who put on CC get the miles, reward points or the cashback but pay it off right away.

 

Some contractors will take credit cards plus a 3% fee, so it negates any airline miles or cashback rewards.

 

We do our own work 95% of the time, so, credit card we pay off with money we have saved to do the work....

 

Any of you guys who do your own work are welcome to come work on our kitchen! All we need are cabinets, counter top, floor covering and appliances! My son does this kind of work, but he's always too busy to work for dad!

 

just bought some windows through Lowe's.... new CC, no interest for 24 months.... easy peasy