Heloc or not to heloc?

[elessar78]

Are there any general guidelines when and if a homeowner should use a HELOC to fund home maintenance?

I don't like accumulating more debt while we are in the process of eliminating it, but we had to use most of our liquid savings to pay for recent medical bills and were hoping to build that back up before another incident hit that needed cash.

The maintenance in question is to build a new retaining wall against a

slope. I work Saturdays now as well, to make some extra money, so my time to do this myself is severely limited.

Thoughts and advice?

[JoeP]

How tolerant are you for risk? Would you be able to make the payments if your household lost an income? Are you confident it can be paid off before you plan on moving? Is the interest rate fixed or variable?

Having had a HELOC, I can say that it came in handy for a major expenditure (3 season porch) and few emergencies prior to us getting our emergency fund established. It also helped us address a dumb credit card spike, because we simply wrote a check from the 3% heloc to pay off the 17% CC.

[snafu]

How urgent is the retaining wall? Is the problem structural or is there a cosmetic component? Can the job be done piecemeal? In spite of limited time, is there any part of the job you and family can undertake to save costs? Can you price out supplies to reduce costs or at least know the cost and ask the contractor to pass his tradesman's discount to you? Do you have/know someone with a truck to reduce transportation costs.

In my mind a HELOC is similar to a 2nd mortgage since the lender can charge costs and fees unlike a straight up car loan.. It's important to check rates with at least 3 lenders because of interest rate variables. Some lenders give discounts, CUs give back a percentage of profits as earning shares.

[elessar78]

How urgent is the retaining wall? Is the problem structural or is there a cosmetic component? Can the job be done piecemeal? In spite of limited time, is there any part of the job you and family can undertake to save costs? Can you price out supplies to reduce costs or at least know the cost and ask the contractor to pass his tradesman's discount to you? Do you have/know someone with a truck to reduce transportation costs.

In my mind a HELOC is similar to a 2nd mortgage since the lender can charge costs and fees unlike a straight up car loan.. It's important to check rates with at least 3 lenders because of interest rate variables. Some lenders give discounts, CUs give back a percentage of profits as earning shares.

Good info. The amount is small enough that I could probably put it on a 0% CC I open up and pay it off in 12-18 months.

The job is cosmetic, I believe, no structural. Although it's on a slope so I don't know if it will cause

Yeah, I've priced out the costs and what not and I'm debating whether to still tackle it piecemeal but then this project consumes an inordinate amount of my limited free time which I would like to spend with my kids (specifically) on Sundays. The bonus is that I can hire some of the neighborhood kids that help with my yard work to help me do demo.

If I can spread out the costs, I can absorb that much easier without taking out a loan.

In fact, I know I can h

[ua_guy]

Unless it's structural and is presenting a health or safety hazard, I would not finance a retaining wall. Examples of health/safety hazards would include landslides, drainage issues that are causing damage to your property or to your neighbor's property, or drainage issues that are causing water to run against or underneath a house. If it's purely for beautification purposes, I would say no, definitely not worth financing via a heloc. I would use a heloc for things like a new roof or significant structural remediation/repairs.

[Weird Tolkienish Figure]

Are there any general guidelines when and if a homeowner should use a HELOC to fund home maintenance?

I don't like accumulating more debt while we are in the process of eliminating it, but we had to use most of our liquid savings to pay for recent medical bills and were hoping to build that back up before another incident hit that needed cash.

The maintenance in question is to build a new retaining wall against a

slope. I work Saturdays now as well, to make some extra money, so my time to do this myself is severely limited.

Thoughts and advice?

Don't go into debt for cosmetic or "upgrades". Emergency only. If your furnace dies, you need a new roof as leaks will threaten the structural integrity of your home, then debt is fine.

You do what you want, but ugly isn't worth the stress that debt adds in my opinion.

Even if it's more than upgrades, for example we have some windows we want replaced because they leak heat, but I do not want the stress that debt entails.

[snafu]

If it's cosmetic I suggest doing it piecemeal. I like the idea of hiring neighbourhood kids as this is the type of thing my DSs did in middle & senior HSch. They learned a lot about landscaping, being on time, following instruction to the letter and working as a team. I suggest drawing out a plan and listing suppliers & costs. You may prefer to open a dedicated 0% CC for the project as it's good to keep records should you decide to sell sometime in the future. We always break down big jobs like this into manageable, daily segments.

You may need two consecutive days for teen labour during demolition. For the rest their time is pretty flexible like 6 - 9 PM weekdays. You need only demonstrate what you want done and be on site to supervise raw brawn. Plan to prep one hour each Saturday and two hours actual work each Sunday to give DKs he remainder of the day. You might be able to eek out another hour in the evening when DKs are being readied for bed if you have long hours of daylight.

Does that make it do-able?