Heloc, Construction Loan, Home Equity Loan or Something Else?
Hi Terry! I am currently looking to renovate my home, pay off some credit card debt, and balance my overdrawn mortgage escrow. Generally the home project should cost around $40,000 and I would need and extra $20,000 to pay off everything else. Do you recommend a certain kind of loan or line of credit and do you have a short list of the best places to acquire these loans? We have a little over $100,000 of equity in our home. My family and I have been in a tough place financially and very much appreciate your help. Thank you and Happy Holidays!
Terry Says
So the real question is why, since you’re in a deep hole, do you continue to dig?? It’s one thing to pay off existing debt. But from what you said, this does not seem to be the time to do a home renovation. Instead, I suggest that you get a second job (or someone in your family does that) and pay down your existing debt. Then continue to save more for the renovation.
I think you would benefit from a session with the non-profit National Foundation for Credit Counseling. They can look at your specific situation. Call them at 800-388-2227 and you will be connected to the nearest local agency. This is not a case of “the best place to borrow more” but more a case of how to reorganize your finances to get out from under your existing debt.
