When you work only 3 days a week and have a major fixer, it can be a challenge to figure out how to pay for it all. I love my short work week and have zero desire to work full-time. Although I love my job, I love having extra free time even more (especially with little kiddos).
The way I did my first house, and started to pay for some things on this one, was to use my Home Depot credit card. Every so often I’ll get a coupon in the mail for 18 or 24 months 0% financing. So I’d put a big-ticket project (like all the materials for a bathroom remodel) on the credit card, and pay it off before I would be charged any interest. By the time a project was paid off, I’d be ready to start and charge another one. It worked really well for me, and I never paid any interest on anything.
The only problem with doing things this way is that finishing everything takes longer. I need (ok, want) a new roof, siding, and windows NOW. The sooner I get this house done, the sooner I can enjoy it (and move on to some ambitious landscaping plans). Sure, I’ll flush some money down the toilet on interest, but the benefits outweigh the negatives. Especially if I can find a good deal.
I looked into a couple options. The first was a Home Equity Line of Credit. The rate was around 5%, plus an appraisal fee and other bank fees. It’s not a bad deal, but the house needs to be appraise-able to qualify for the loan. With no kitchen, and a half-dozen other started-but-not-finished projects going on, it could be a while before I get to that point.
Another bank loan option was FHA Title I Home Improvement Loan. It required no appraisal and you can borrow up to $25,000. Although I have excellent credit, my rate would be 6.75%, and fees totaled about $1750. It’s better than interest on a credit card, but I thought I could do better. Plus you are required to get estimates and materials lists for everything, and it all needs to be inspected by the bank after the work is done. Not very friendly for the do-it-at-your-own-pace DIYer.
Then there’s the Home Depot Project Loan. It limits you to buying only at Home Depot, and the rate is 7.99%. But with no appraisal and no inspections, it was the most DIY-in-a-fixer friendly option for me. You also get a 6 month buying window where you are not required to make regular payments (just interest payments). I guesstimated that I wanted to borrow $15,000 to get the roof, windows, siding, and flooring done. After about 2 minutes at the Customer Service desk I was approved for $20,000. It was that easy. No pile of paperwork, no paystubs.
A few days later, I was reading some comments from some article online, and someone mentioned the Lowe’s financing deal. They offer a 5.99% rate with the same 86-month payment schedule. Unfortunately, Lowe’s is over an hour away while Home Depot is only about 20 minutes away. Plus, Home Depot has been very generous with extending me credit, while Lowe’s gave me skimpy credit limits in the past. I wanted to shop at Home Depot, with Lowe’s rate. After asking to match the lower Lowe’s rate, Home Depot obliged. So to my fellow fixers, if you need to finance some big-ticket projects, I highly encourage you to do the same. It doesn’t get any better than that! And with payments of just over $200 (if I stick to my $15k budget), it’s also very affordable.