Line of equity
My parents own a home which is requiring approximately 50k in repairs. They are unable to obtain a loan to repair it due to credit issues. The home is paid for and could probably sell for 100-125k as is. If it was fixed up I would estimate that it could sell for maybe 200-225k. My question is I have a line of equity on my personal home for 100k and would like to know if it makes sense to borrow on it to make the necessary repairs and have them repay me after the sale of their home? Thanks for any advise you can offer.
Terry Says
It doesn’t make sense, and I advise against it — especially if you have siblings, because it will cause problems down the road. OK, this is a tough moment for you and your parents to face. It is likely time to sell the house — as is — and move them to a senior residence that offers more services and where they can live comfortably without chores.
You’re speculating with their future by turning into a fixer-upper! It works for Chip and Joanna, because they are pros. But a lot can go wrong when you decide to do those repairs, and it is always more costly than it looks. Then you’re faced with the issue of selling the house for the profit you think you deserve.
Don’t get into this quagmire. The $100k+ they can receive by selling now will likely tide them over, along with their SS, very nicely in a much more appropriate living space.
