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Help with Home Equity loans (aka paying for a new roof)

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Help with Home Equity loans (aka paying for a new roof)

Old 04-17-08, 06:20 PM
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Help with Home Equity loans (aka paying for a new roof)

So I've had a few minor roof leaks at my house and knowing it's within needing to be replaced in the next few years I'm going to get it replaced. The first bid came in today and it was going to be around 8700 for the roof and chimney work required. I was hoping it was going to be closer to 5 but I guess there's more involved than I thought. I've got two other bids forthcoming but I suspect they'll be in the same neighborhood.
So here's my dilemna. I have only owned the house since 12/2006 and with the way the market is, the house is probably worth about 13k-14k more than my mortgage balance if we're being generous. I've done some reading and it seems like a home equity line of credit would be the way to go but I'm fearful I won't have enough equity to borrow 10k. If that's the case, it seems like the only other option I have is a personal loan which commands a higher interest rate and I'm not even sure I could get a 10k personal loan.
So what's a guy with not much equity to do? Anyone been in this situation or have any web sites to recommend?
Worse comes to worse, my Dad offered to loan me half and then I could take a 5k personal loan for the rest but I suspect even given my low amount of equity, there's still a better way to do it I just don't know what it is.
Old 04-17-08, 06:44 PM
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I guess you could sue the previous owner. I knew a woman years ago who went through a divorce and their house was sold and years later the people who bought it filed a lawsuit against her over a deck on the house. I have no idea on the out come of that.
Old 04-17-08, 06:59 PM
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I doubt that's a viable option at this point and my home inspector did note the leak, he just said it didn't appear to be active so I should have known that there could be a problem. I knew it was an older roof that would need to be replaced in a few years anyway so it's not a huge shock to me.
Old 04-17-08, 07:03 PM
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10K @ 11% for 5 years = $212/month.
10K @ 8% for 5 years = $202/month.

Heck, you've got to get your roof fixed. Take the personal loan if you have to. The loan amount is so small that you're not getting huge savings from a lower interest rate.

Getting a loan that small shouldn't be a problem. I got a LOC (not HELOC) for $25K pretty easily.
Old 04-17-08, 07:04 PM
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It will be almost impossible to secure a HEL or HELOC if the value of your home is only ~$15k more than what you owe. You're awfully close to 100% LTV, and nowadays, many lenders don't go beyond 85% LTV for HELOCs, some areas are down to 65% LTV.

Check with local banks and credit unions, you *might get lucky, but I highly doubt it.
Old 04-17-08, 07:46 PM
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thanks for the info, so far browsing some of the larger banks the only one that seems like it may be viable is wachovia, I need to do a bit more digging but i'm thinking the personal loan may be the way to go, i'll have to do some more research and see if i can get a 10k one.
Old 04-17-08, 08:14 PM
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I don't think 100% is too far fetched, but just a little higher rate.

With your current SEV, you could easily qualify for (2*SEV)-Mtg. Balance.
Check with your credit union, mine has several options:

Home Improvement Loans
Spoiler:
April 1, 2008

Loan Term APR*
(As Low As)
0-60 Months 7.35%
New loan product designed to provide cash for home improvement projects without using your home equity to secure the loan, for loan balances from up to $7,500. (NOTE: Loan balances greater than $7,500, but not to exceed $25,000, are available but may require lien placement…ask us for details). Use the Home Improvement loan for home repairs, improvements, property enhancements, land purchase and more. Contractors and builders receipts may be required for verification. 60 month loan terms available – click apply now or call us for details 800-831-8370 today!


Home Equity Line of Credit Loan
Spoiler:
April 1, 2008

Loan Term APR*
(As Low As)
0-80% LTV*** Prime Rate**-0.0% APR*
81-90% LTV*** Prime Rate**+0.5% APR*
91-100% LTV*** Prime Rate**+2.5% APR*
**As published in the Wall Street Journal. No application fee. No annual fee.
***LTV = Loan To Value


Home Equity Fixed Loans
Spoiler:
April 1, 2008

0-80% LTV** APR*
(As Low As)
0-60 Months 5.45%
61-120 Months 6.00%
121-180 Months 6.30%
181-240 Months 6.85%
No application fee. No annual fee. **LTV = Loan To Value. Balloons loans available. Maximum term 240 months.

81-90% LTV** APR*
(As Low As)
0-60 Months 5.95%
61-120 Months 6.50%
121-180 Months 6.80%
181-240 Months 7.35%
No application fee. No annual fee. **LTV = Loan To Value. Balloons loans available. Maximum term 240 months.

91-100% LTV** APR*
(As Low As)
0-60 Months 6.95%
61-120 Months 7.50%
121-180 Months 7.80%
181-240 Months 8.35%
No application fee. No annual fee. **LTV = Loan To Value. Balloons loans available. Maximum term 240 months.



Another option would be a (low rate) credit card, but with home equity, you can write off the interest (I am not sure about the home improvement one).

Last edited by jonw9; 04-17-08 at 08:16 PM.
Old 04-17-08, 11:42 PM
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I'll look at this tomorrow once I'm a bit more clearheaded, but the equity loan market has completely dried up. It's going to be hard to get one.
Old 04-18-08, 12:32 AM
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Go to the library and read some books on replacing a roof - it's not hard work at all, just very tedious. That $8,500 job would probably cost you $2,000 or so in materials if you do the work yourself, plus a week or two of your time.

Do you have any friends with roofing experience? Start talking to them, see if they can give you help getting started.

A few years ago I replaced my roof by myself, cost me about $1,300 in materials*, neighbors with identical roofs were paying $4,500 to have their roofs replaced by professionals.

The $1,300 included the shingles, tarpaper, some nails, a few sheets of plywood, replacement air vents, roofing tar, etc. I also had bought a $250 roofing nailer (bostich) and a $200 air compressor, it turned out that I didn't really need them though I have used them on several occasions since (friends roofs). Again, just go to the library and check out their roofing books, there is a ton of information there. Roofing is not hard, it's just very labor intensive.

Last edited by Heat; 04-18-08 at 12:39 AM.
Old 04-18-08, 01:10 AM
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He's a giant. He can't stand on a roof without breaking it.
Old 05-03-08, 12:12 PM
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So just a quick update, i looked around and the equity options didn't look too good for my position and i figured so such a small loan amount, it didn't make sense to go for that. I found TD Bank North had a "Home Improvement" loan (basically just an unsecured personal loan) and I was able to get a good apr and do a 60 month loan bringing the monthly payment to a figure I was comfortable with. Got a few more bids on the roof and 8700 seems to be the right number compared to some of the other bids, plus it's a contractor that several people I know have used so now just to get the ball rolling.
As for doing it myself, I'm all for DIY stuff but I think a roof is one area where I'd rather have a pro take care of it.
Old 05-03-08, 03:55 PM
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There are some home improvement companies that can arrange for another mortgage regardless of LTV. The interest rate won't be any bargain though, probably close to credit card interest. The only advantage is it will be tax deductable.
Old 05-03-08, 06:39 PM
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I would check with Home Depot and Lowes. They may cost a little more then a roofer, but they often have 6 to 18 month no intrest on their credit card.

Also if you work for a large company, do they have a credit union?

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