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money people...how to best finance a new floor?(4 posts)

money people...how to best finance a new floor?ColnagoFE
Apr 8, 2003 7:40 AM
Hey...I'm not always the brightest bulb when it comes to money matters and was wondering what my best options were when it comes to financing a new floor for my house--Would like to have a non-biased opinion before I make any decisions. Basically, I want to hire someone to put hardwoods upstairs and some tile downstairs while my family and I are on vaction this summer. I figure it'll run me around roughly $5-6k for the whole thing installed. I have tons of equity in my current house and perfect credit so financing is not a problem. I don't like debt though and want to pay it off as soon as I get the cash so anything really long-term with a big penalty for early payment may not be the best option. Is something like a home equity loan gonna be my best bet or are there better options I'm not thinking of?
My favorite is 0% introductory rate Visa/Master...asphalt assault
Apr 8, 2003 7:55 AM
If you run past the 6 month (or whatever), roll the remainder on to another introductory rate card. Just make sure to CANCEL any accounts after you pay off the balance or it might come back to bite you in the arse later somehow.

I just finished 3 roomes in my house in hardwood. About a grand went on the card and the remainder was cash I had set aside for the project. I don't like debt either.
0% is best. If you cannot get thatmoneyman
Apr 8, 2003 8:24 AM
A home equity line of credit (HELOC) is a great way to do it. Your only borrow as much as you absolutely need, interest payments may be tax-deductible, you are financing a permanent improvement/investment in your home that will likely increase its value, rates are very low, and you can get checks to access the account. That way you can pay the contractor easily, rather than have to worry about advances and wiring funds.

$$
Depending on your current mortgage interest rate...PdxMark
Apr 8, 2003 8:33 AM
You might have a "free-money" option.

Essentially, if the spread between your mortgage rate and currently available rates is enough, you can refinance, pull out the equity for the finance fees and your flooring project, and keep your current payments and remaining term.

You'll refinance at a 15 year loan, and pull out the $$ you need, while giving you lower payments than you are currently making. The trick is to then calculate accelerated pay-off of your new loan by making payments at the same level as your current mortgage payment. If you work it out correctly, you'll make the same monthly payment as you are now, over the same term that you have remaining, all while pulling out the money you want for your project. We've used it on a cabin we co-own with some friends...

There might be a slight change in the amount of your interest deduction at the end of the year, but I'm not sure about that.