home equity loan?

Question

has anyone taken one out? good idea or bad idea? i want to use about 10-15k for home improvements. new floors, countertops, kitchen cabinets. my house is so old and my countertops are literally painted. no doors on my cabinets. it’s driving me nuts. i have about 70k in equity in my house right now but i don’t want to take more than i need bc i don’t want a high monthly payment. pros and cons?! i know nothing about them 😅

Answer

I would do your research on the market. I saw something yesterday that essentially said that some banks were taking out insurance because they expect so many loans to default this year. Might be worth doing your own research and making some small improvements that make your life better without going into any major debt right now.

Answer

A home equity line of credit is better than a home equity loan IMO.  The big difference being on a HELOC you can make smaller payments or interest only payments when you borrow from it.  A home equity loan you have a set amount you have to pay back every month.  
Home improvements is a common reason people take out these types of loans.  Or to have quick access to funds if a true emergency comes up.  Use it wisely.  But you don’t get to determine how much the loan or credit amount is.  An appraisal will be done with a loan to value ratio that will determine what you get.  Although still more than enough my HELOC is less than what my mortgage officer and I asked for bc the appraisal.

Answer

I wouldn't. Instead of paying interest on that loan, I would save money slowly and make changes as you can. You can get doors for kitchen cabinets significantly cheaper than all new cabinets. (That would blow your $15K budget alone) Vinyl plank flooring is quite affordable. Look for deals at hardware/big box stores where you can get money back, have no interest payments, on sale items, etc. Slow and steady is always a better investment than taking out a loan to do it right away.

Answer

Definitely open a home equity line of credit if you can. You can just use what you need and pay back and reuse the line of credit as many times as you like (like a credit card with a very low interest rate). I’d make an appointment at whatever bank your mortgage is with to chat about whether or not this is an option for you. You do have to have a good credit rating and a high enough monthly income to qualify.

home equity loan?

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