Best way to finance the rest of a garage

So I have been working on getting stuff together to tear down my old garage and build a new one and outfitting it (air compressor, storage, gym area, BMX ramp). A lot of the money is coming from either our savings or refinancing the house and using the cash out option when I refinance as our house as significantly increased in value over the past 4 years. However I am probably going to be at most $14k short. I have tried to estimate everything on the highest end for things that I have not got quotes for and there are some things I can leave out for now. How would people recommend going about covering this remaining amount? 0% APR credit cards? Personal line of credit?

Depending on the amount of equity left in your house after the refi, HELOC may be a good option.

pointofdeparture said:

Depending on the amount of equity left in your house after the refi, HELOC may be a good option.

Probably not an opinion as I am going to cash out the difference between what I owe and 75% of the value because this will give me most of the money while keeping my monthly payments basically the same since my interest rate will dropping a decent amount.

Is this a project that is contracted out with a set completion date? If not contracted out could finish and fittings be financed by cash as available?

Rons said:

Is this a project that is contracted out with a set completion date? If not contracted out could finish and fittings be financed by cash as available?

I could do that. I just really really want to avoid a project that stretches out forever. I have been waiting to do this since I bought the house. I am done with this falling over leaking pile of crap.

There is probably $3k to $4k I could easily push out without effecting it to much and I probably will. And I am pretty sure there are quite a few places I can save a decent amount of money. But at best I figure I am going to be at least $5k short.

I am not too worried about taking on a little more debt especially when that debt is going to increase the value of the house. The only debt I have is a little bit of 0% APR debt for some furniture and the mortgage. No car loans, no student debt, no credit card debt. 6 months of emergency savings. Plus the house is in a neighborhood near downtown in the quickest growing city in the state.

You any good at side-gig mechanical? Worked for me when I had a garage shell that needed spray foam and heat and air. Works for beer also.

Pete

Home Depot credit card for materials? They typically send out 0% for 24months coupons I'd spending $2k or more on a single transaction. Or Lowe's/ Menards.

Another option could be to get a loan on one of your vehicles. Say you have a car worth about 10k retail, you can get a loan for like 8k @ 3 or 4% for 36-60mos.

In reply to 90BuickCentury :

Pen Fed loans up to 110% of NADA book value. No age of vehicle restrictions. No mileage restrictions. No minimum loan amount. 

However, only do this if you plan to keep the car because if you sell the car all the remaining loan has to be paid immediately. Also know the bank will require you to keep full coverage insurance on the car for as long as there is a loan. 

 

I am not too worried about taking on a little more debt ... some furniture 

Payoff the furniture debt. If you cant get rid of that small debt easily you need to rethink your finances.

Most people have multiple small debts that pile up and suddenly they are in trouble. I know because I went through that.

We keep debt to a minimum even if means waiting. 

The fact you have savings is a good sign. Most people today live paycheck to paycheck. 

In reply to 93EXCivic :

Are you sure you can repay the 0% interest cards by the due date?  If you are absolutely sure then that's your cheapest option. But if the last day of 0% interest comes and the total isn't paid off it's your worst option. 

• You might want to hold off on buying some of the stuff for the garage.  Air compressor, hoist, etc will not increase the market value of your house. 

Bent-Valve (FS) said:

Payoff the furniture debt. If you cant get rid of that small debt easily you need to rethink your finances.

Most people have multiple small debts that pile up and suddenly they are in trouble. I know because I went through that.

We keep debt to a minimum even if means waiting. 

The fact you have savings is a good sign. Most people today live paycheck to paycheck. 

I could pay it off now easily. But I'd rather use that money to earn interest/do the garage. 

I am not worried about taking on a little bit more debt especially if it sub-$10k which I think I can get it to since I have no car loan or student debt and I have at least 6 months of emergency savings that I will not be touching to do the garage, and pretty decent retirement savings. The other thing is getting the garage done will allow me to stop renting a storage unit at $150 a month so that somewhat factors into the calculations. Cause the way I look at it that is kind of like debt. 

I am just trying to figure out the lowest interest way to do it. 

frenchyd said:

In reply to 93EXCivic :

Are you sure you can repay the 0% interest cards by the due date?  If you are absolutely sure then that's your cheapest option. But if the last day of 0% interest comes and the total isn't paid off it's your worst option. 

It would be tight on that if I needed the full amount but I am pretty sure I could. I will probably need less then $13k because I am being extremely high with the estimates and very conservative with amount of money I have set aside. And there are a number of things I could leave out. Also getting the garage done is going to allow me to get rid of the monthly cost of renting a storage unit so that enters into it. 

If I did use a 0% credit card figured out I wouldn't be able to completely pay it off, how bad an idea would it be to basically roll the remaining balance into a personal loan? 

Your refi is going to come in based on the 75% of the value right now. You are going to be adding more value with this new garage.  You should be able to set up a HELOC based on the increased value when the project is finished.  The only limit will be income calculations to see if the bank thinks you can afford it.

You might also talk to the bank to see if you can do a construction loan for the garage before the refi and then roll it all in the refi at the increased value.

jgrewe said:

You might also talk to the bank to see if you can do a construction loan for the garage before the refi and then roll it all in the refi at the increased value.

That is an interesting idea...

The only risk I could see to that is if the interest rates increase then the refi is suddenly not the money saver it was originally going to be... 

The way things are going I don't think you have much to worry about with interest rates until next year. 

NOHOME said:

You any good at side-gig mechanical? Worked for me when I had a garage shell that needed spray foam and heat and air. Works for beer also.

 

Pete

When you say side jig mechanical? Do you mean as a mechanical engineer? That is something I have kind of wondered about but never really looked into how to actually find. 

In reply to 93EXCivic :

I built my shop to work on my british cars. Along the way, I found out that people pay good money to have the tin on their british cars. repaired ( sills and floors ). So, I got to do what I wanted to do with british cars and I got the $$$ to buy more tools. 

I'm in a similar situation on financing a shop build. I really want to draw up some plans, write a check and a month or three later, move in and start working.  However, I know that's not likely to happen.

The idea of using a CC of any type as a financing tool gives me pause, to be honest.  

As much as I totally get the desire to get it done NOW, I'm more in the "save more, sell some stuff, and wait until you have the $$$" camp. Perhaps combined with doing some of the build yourself?

In reply to Ian F (Forum Supporter) :

I am going to be doing the insulation and inside finishing. Having pros do the shell, electrical and drywall. 

I can get the money together up to the drywall (and possibly including the drywall depending on a few things) easily with refi and money from savings. So I'll probably do that, then figure out the rest as I go. That would leave work benchs, attic, A/C, paint, a few other things left to do. Cause if I get the garage to that point it is still a massive upgrade on what I have now... 

If you have ok credit, online lenders like LightStream.com have solutions specifically to meet this kind of need with low-interest term loans.  

Please please please never use a credit card to fund anything that you can't pay off in 6 months or less. It is a *trap* that catches out millions of people every year, my spouse included.

nderwater said:

If you have ok credit, online lenders like LightStream.com have solutions specifically to meet this kind of need with low-interest term loans.  

Please please please never use a credit card to fund anything that you can't pay off in 6 months or less. It is a *trap* that catches out millions of people every year, my spouse included.

I have very good credit (over 780). I think the credit card would depend on how much I end up needing at the end of the amount I have saved and the amount from refi. If it is sub $5k I can pay it off easily in 6 months. If it is more the $5k i'd need to figure a loan or just pay as I go to finish it. 

Thanks for the advice so far. I am pretty sure I am going to refi and take the money from that and the money I have saved, build as far as I can which will get me at least through getting the electrical done then probably get a little bit of a loan or just finishing it off as I can afford to or combo of both.

I am calculating my cost based on quotes I have got and add 10 to 25% extra on top of those quotes to hopefully be conservative on the costs and I am fairly sure I will have more put aside then I have estimated too. I am just being conservative on that too just working on figuring out a few other odds and ends.

93EXCivic said:

frenchyd said:

In reply to 93EXCivic :

Are you sure you can repay the 0% interest cards by the due date?  If you are absolutely sure then that's your cheapest option. But if the last day of 0% interest comes and the total isn't paid off it's your worst option. 

It would be tight on that if I needed the full amount but I am pretty sure I could. I will probably need less then $13k because I am being extremely high with the estimates and very conservative with amount of money I have set aside. And there are a number of things I could leave out. Also getting the garage done is going to allow me to get rid of the monthly cost of renting a storage unit so that enters into it. 

If I did use a 0% credit card figured out I wouldn't be able to completely pay it off, how bad an idea would it be to basically roll the remaining balance into a personal loan? 

Just do another transfer to a different card with a 0% transfer offer. PL's, even with good credit, have much higher interest rates. 

How much closer would taking 79% of the equity vs 75% get you? Still no PMI because of LTV, and it's not going to make a big difference on your payment. 

z31maniac said:

93EXCivic said:

frenchyd said:

In reply to 93EXCivic :

Are you sure you can repay the 0% interest cards by the due date?  If you are absolutely sure then that's your cheapest option. But if the last day of 0% interest comes and the total isn't paid off it's your worst option. 

It would be tight on that if I needed the full amount but I am pretty sure I could. I will probably need less then $13k because I am being extremely high with the estimates and very conservative with amount of money I have set aside. And there are a number of things I could leave out. Also getting the garage done is going to allow me to get rid of the monthly cost of renting a storage unit so that enters into it. 

If I did use a 0% credit card figured out I wouldn't be able to completely pay it off, how bad an idea would it be to basically roll the remaining balance into a personal loan? 

Just do another transfer to a different card with a 0% transfer offer. PL's, even with good credit, have much higher interest rates. 

How much closer would taking 79% of the equity vs 75% get you? Still no PMI because of LTV, and it's not going to make a big difference on your payment. 

A decent amount closer. Trying to avoid it has it is a slightly higher interest rate but that maybe an option.