Money for renovations

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AugustMom
LIF Adolescent

Member since 5/11

743 total posts

Name:
Christine

Money for renovations

Hi all!
What types of loans are out there for house renovations? Any tips/tricks?!
Thanks!

Posted 2/4/18 10:43 PM

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LSP2005
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Member since 5/05

19458 total posts

Name:
L

Re: Money for renovations

HELOC, but just note that tax laws have changed for 2018 and the interest is no longer deductible, even for existing loans.

2nd mortgage

Line of credit from the bank (private loan)

If the home was damaged during a natural disaster there are sometimes other loans available

401k loan (but this one is really terrible)

Posted 2/4/18 11:51 PM

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jellybean78
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Member since 8/06

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Name:
Mommy

Money for renovations

I would take out a 401k Loan before I take out a second mortgage for renovations. Remember taking a 2nd mortgage will cost you closing costs plus God forbid something happens and you lose your job or can’t afford your mortgages you will get foreclosed on.

Also a lot of the places that do renovatios offer financing so you can also go that route. A personal loan is also another option

Posted 2/5/18 7:46 AM

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CSK
LIF Adolescent

Member since 9/11

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Re: Money for renovations

Posted by jellybean78

I would take out a 401k Loan before I take out a second mortgage for renovations. Remember taking a 2nd mortgage will cost you closing costs plus God forbid something happens and you lose your job or can’t afford your mortgages you will get foreclosed on.

Also a lot of the places that do renovatios offer financing so you can also go that route. A personal loan is also another option

Most 401k loans become due when you are no longer with your employer. Sometimes there is a grace period to be able to refinance, but shortly after termination you will owe it all back or take it as a taxable distribution subject to penalty.

I'm not saying don't do it, but go in eyes open.

My understanding is that for large projects you can go in with a construction type mortgage where your exsiting loan gets refinanced into a new loan with a larger balance, with distributions paid to the contractor. My neighbor is doing this with his dormer, all based upon the new value of the home.

Posted 2/5/18 9:34 AM

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Aries14
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