A few years ago my husband and I decided to start a family. We lived in a great neighborhood with good schools and lots of other families with children nearby. Perfect. We turned the second bedroom into every little boy’s (mother’s) dream. Blue walls, red accents, and lots of cars – antique cars, new cars, car memorabilia on the walls.
Fast forward a couple of years to dump trucks in the middle of the living room, race cars under the sofa, bins and baskets full of the things that never seemed to return to his room. Oh, how I hated cars. We needed a playroom to reclaim some adult space. Where to look? We didn’t have another space on the main floor where my son could play, make a mess, and I could keep an eye on everything. Since I didn’t want to move, there was only one option for us (and for my sanity). A home addition. Eventually I could reclaim it too. I’ve always wanted a sunroom.
Next it was time to set up the financing to pay for it all. In my job, I tell people every day about the great benefits of using your home’s equity to do the things you want. So I took my own advice.
My husband and I applied for a home equity line of credit on-line. The application was easy and took less than 20 minutes at home after dinner. Within a day, I got a call from the bank. A couple of days later, we were approved. Within a short time we were signed, sealed, and ready to go. Time for the contractor…
With our home equity line of credit we were able to pay a contractor the first third of the estimate to get started. A month later came the second payment as my new windows went in (There were a lot of them, after all. I did say future sunroom). Finally, the last contractor payment came and went. And the room… well, it still had a ways to go. To save money, my husband and I decided to finish off the interior ourselves.
You may have guessed from my previous blogs, I enjoy being a do-it-yourselfer. After many trips to the home improvement store, an aching back from painting, sore knees from tiling the floor, one itchy husband (fiberglass insulation in July) and several internet transfers from our home equity line of credit to pay for it all, we had a room. I couldn’t have been more proud.
Then, last but not least, it was time to fill the room. This required just a few more transfers from our line. Sofa. Area rug. Blinds and curtains. Storage.
A toy-free night in my reclaimed living room. Did someone say play date? No problem!
Now I can say from experience a home equity line of credit is a great way to manage expenses. Here are a few final tips that I’d like to share:
- Apply for a line 10-15% larger than your estimate to cover the extra expenses that inevitably come up. This way you won’t need to return to the bank to ask for an increase to your credit limit.
- Set up internet banking to allow for electronic transfers from your line to your checking account. I found it much easier to keep track of one checkbook register instead of two. This also allows you to transfer lump sums to pay bills whenever needed– like a Sunday trip to the home improvement store.
- Finally, make the largest payment your budget allows each month to pay down your debt faster. The beauty of a line of credit is you can access the funds again if you need them. Or when you’re ready to start your next project.
Have you ever used a home equity line of credit or loan to make something you wanted a reality?