Home improvement projects have a way of increasing in priority when youre always in the house.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
Jill Emanuel, center, with her family (from left) Zeke, 8, Matt and Tyler, 11. When she was ready to replace her air-conditioning system and ductwork, she said she ended up getting five estimates. Photo courtesy of Jill Emanuel
But what if your car breaks down, or you have a sudden medical bill?
Well, Jill Emanuel is the lead financial coach atFiscal Fitness Phoenix.
She works with plenty of clients as they choose financing for their home renovations.
First things first: Whats your reason for doing this home project?
Doing this assessment can help you prioritize projects.
Heres what else to consider before you roll a project.
Consider ways you couldsave by doing some (or all) of the home improvement project yourself.
For larger projects like renovating a bathroom doing the research could take months.
When youre ready to get an estimate, request quotes from at least three sources.
And they were all recommending different things.
After the initial research phase, its time to think about financing your project.
Here are seven to consider, including the pros and cons of each.
But how much should you shell out for a renovation and when should you hang onto the cash instead?
Right now, most financial advisers sayhold onto your cash, given the current economic uncertainty.
Youll have to figure how much you’re gonna wanna set aside for an emergency fund.
There are three options: ahome equity line of credit(HELOC), ahome equity loanandcash-out refinancing.
So which form of financing should you choose?
Then they go to the next part they pull out $10,000.
It can work pretty well for that.
But beware of what youre signing up for, Emanuel warned.
But the balance never goes down.
Accept a 0% Financing Offer
So what did Emanuel end up choosing to finance her air-conditioner replacement project?
They had a partnership with Wells Fargo that was doing 18 months of 0% financing for home improvements.
Ultimately, thats the route we took.
But that interest will be waived so long as you pay the full amount by the introductory periods deadline.
A personal loan would have been better, even if it was a 10% loan, she said.
They still would have come out ahead than having all that back interest applied at the end.
How much extra could it potentially cost?
Emanuel checked her own statement after four months into her 0% interest introductory period.
In just those four months, $1,500 worth of interest has already accrued, she said.
She considers the statement just another reminder to pay off the balance well before her introductory offer ends.
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder.
Readher bio and other work here, then catch her on Twitter @TiffanyWendeln.
No Interest Til Almost 2027?
Balance Transfer = Credit Card Cheat Code
