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First Read: Part 1 | Part 2 | Part 3
John and Sara have been doing well with their new budget. They’re using their credit cards but paying them off in full each month. They have been in their home for over five years now and the equity is growing. They are starting to get an itch to improve or renovate!
They approach me for a loan for a new pool. And of course along with the new pool comes a hot tub and if you are adding a hot tub might as well update the deck too, right?
They are doing well – the credit cards are paid down each month and their line of credit is used and then paid down again through a month cycle. Because of all of the positive signs I approve a larger line of credit for the upgrade. They are also going to do a lot of the work themselves to save money.
By the end of the summer costs still ended up being more than they expected. The pool lead to a hot tub and new deck, which also lead to new landscaping.
It took most of the summer to get the work completed and at the end of it Sara was back in. She realized she does not like the large line of credit. It was too daunting and she couldn’t make any head way paying it off. So instead we set this up as a loan secured by their house to ensure the rate was as low as possible. Once their mortgage comes up for renewal we will blend it all in to one, why you ask?
Well the funds from this loan were used to improve the value of the property, making their home worth more if they want to sell; although they’re not going to want to leave their new yard for a long time!
Speak to a Libro Coach if you have plans for home improvements. We can work out a plan to achieve your upgrade goals.
Tanya
Posted on June 6, 2011 by Tanya Quipp
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