Cash out refinance

Cash. We don't renovate until we have the amount we are spending in cash.

We did a loan for our last renovation. I’m paying in cash for the next one.

PP here - we took out a home equity loan because I didn’t like the variable interest rate of the HELOC. It was pretty favorable with basically no fees.

Per our financial advisor, we were gonna do a HELOC, but not touch it, and pay in cash. The HELOC was going to me our emergency fund. We ended up not even doing the HELOC bc we had a lot of liquid, so paid cash for $80k Reno and still have plenty in savings. I do realize we are very lucky. But we also work damn hard.

A lot of people take out a loan, pay it off, and then start again for a new renovation. And some companies (like roofing or HVAC companies) must have payment plans. You can also pay in cash but do it in phases, DIY some things, and buy the materials yourself. That takes longer though. And doesn't have that immediate and fresh "before and after" look people want these days.

We did an interest only loan for our $350k renovation 15 years ago. As soon as the reno was over, we refinanced, combining the original loan and the interest only loan into one loan on the house. Will be paid off in 5 years, is locked a 2.75%

Cash + HELOC + Personal loan (toward the end) then did a refi at the end of it. Thankfully actually made some money (based on appraisal)!

Cash. I am done with loans other than paying my mortgage.

I wanted to get a HELOC for a major renovation (150k) but my husband wanted to use cash, so we did. Cashed out all of our stocks. I'm still not sure it was the right decision, but that's what we did.

Anonymous wrote:A couple years ago, I asked the same question here because I didn't see how we could save up enough for our projects. But the people who said to pay cash got to me. I socked as much away in a few different accounts (a Vanguard account and then a CD ladder for some) and we have the money for our project AND made money off the saving along the way.

It seemed impossible at the time, but I figured that our spaces were livable, they just weren't ideal. That was okay while we worked on saving.

Covid helped...we spent much less in the last year than we usually do because we weren't commuting, eating out, etc.

Correction!

A couple years ago, I asked the same question here because I didn't see how we could save up enough for our projects. But the people who said to pay cash go to me. I socked as much away in a few different accounts (a Vanguard account and then a CD ladder for some) and we have the money for our project AND made money off the saving along the way.

It seemed impossible at the time, but I figured that our spaces were livable, they just weren't ideal. That was okay while we worked on saving.

Covid helped...we spent much less in the last year than we usually do because we weren't commuting, eating out, etc.

You want to be removed form the process as much as possible. Use a construction loan that requires the bank to disburse the funds at certain times. If a builder doesn't want to go that route don't use them. This is also to protect you. How often do you hear of a contractor walking off the job and not finishing everything?

Once the job is done, pay off the loan. Why tie up your cash during the construction and remember, contractors always need just a little more of the funds for xyz etc

Cash for a 60k renovation. But we were able to do it fairly easily out of savings. Would have considered a HELOC for a larger renovation.

Cash. We saved up. We’re nearing the end of a 45k basement Reno. Also, the money doesn’t go out all at once. It was basically 5k checks and payments here and there.