Money for home repair: savings, bank loan, or?

[Anonymous]

We bought a fixer-upper in a good neighborhood at a "bargain" price.
Renovation costs and unexpected repairs have ballooned beyond our expectations, of course, and we are running out of money.
We need maybe $20K to finish the work (leaky roof, etc).
Do we take this money out of our sole remaining emergency fund (not tied to retirement), or do we take a bank loan? Are there any other options?

Your advice is much appreciated.

[Anonymous]

loan

[Anonymous]

I think a loan. If you really had an emergency and that fund was gone, it would be very difficult to borrow anything at that time.

[Anonymous]

Use the money you have or pay as you go.

Stop being a debt slave.

[Anonymous]

Pay as you go, and maintain that emergency fund if at all possible. Meaning, put a hold on your repairs until you can afford to pay for them in cash (with the exception of anything that absolutely MUST be repaired immediately, for which you should break into the fund). Debt makes us slaves.

[Anonymous]

For anything that is urgent that you can not afford you can always take a retirement loan out.

[Anonymous]

OP here. During today's storm the roof was leaking all over the kitchen, so these repairs are not exactly frivolous!
If we pay all the repairs with our emergency fund, it will be drained, and that makes me anxious just thinking about it.
Sigh. No good solution.

[Anonymous]

What's your capacity to repay a big loan? If you could do it quickly, I'd look into a 0 interest credit card, or putting it on your own card, then doing a balance transfer to a 0 interest card. That way you could have 8-12 months to pay it off.

For the roof, do check a few roofers; you might find that you can get away with cheaper repairs now and defer a bigger replacement project until later. We've had two big leaks since we moved in, and both were dealt with by repairing or replacing flashing at dormer seams or downspout areas. Each job ended up being under $500 for something that we originally worried would be pretty major.

[Anonymous]

Third option - negotiate payment plan with roofers. People are hungry for work.

[Anonymous]

I'd do the loan. Having no emergency stash would make me crazy. Although I generally agree that it would be nice to wait and save up cash for everything, that isn't always practical, especially with a leaky roof.

I would not put it on a credit card or try to do a balance transfer. You have to pay a fee (usually something like 3% of the balance) for a transfer, so they are not free.

[Anonymous]

Can you barter?

[Anonymous]

Anonymous wrote:I'd do the loan. Having no emergency stash would make me crazy. Although I generally agree that it would be nice to wait and save up cash for everything, that isn't always practical, especially with a leaky roof.

I would not put it on a credit card or try to do a balance transfer. You have to pay a fee (usually something like 3% of the balance) for a transfer, so they are not free.

Unless you have Capital One- I get free checks from them all the time.

[Anonymous]

Anonymous wrote:OP here. During today's storm the roof was leaking all over the kitchen, so these repairs are not exactly frivolous!
If we pay all the repairs with our emergency fund, it will be drained, and that makes me anxious just thinking about it.
Sigh. No good solution.

What exactly is your emergency fund for?

You people kill me, seriously.

Just rack up some more debt like everyone else does then you can feel better looking at your emergency fund bank statements each month.

[Anonymous]

Sounds like an emergency to me. Then you can work on rebuilding your emergency fund instead of paying off the loan.

[Anonymous]

I'd keep the emergency fund and get a loan - rates are low.

Don't home equity loans have lower rates than personal loans in case of emergency? I would need cash in the bank - ESPECIALLY in this economy.

Just curious. Was the condition of the roof not pointed out in the home inspection prior to purchase?