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How would you pay for this - New Roof (1 Viewer)

belljr

Footballguy
So I am in the market for a new roof. I have enough in savings to cover the cost but that would leave very little left.

Would you pay it that way or use a HELOC, which I already have at prime. The interest is tax deductible and pay it off over a year or 2.

Thoughts.

 
Why would you pay to borrow money that you already have?
Taking from savings is cheaper and you still have the HELOC in case of an emergency.
I think usually these are good advice but to me my savings is mostly my what if I lose my job money. If you lose your job will you be able to get the HELOC loan?
He said he already has a HELOC at prime. Once it's established, it's available even if he loses his job.

 
What is a HELOC?

I know I can google it sometimes I like to wait for an FBG who wants to give me a concise explanation

 
I've been getting interest free credit card offers consistently for the last couple of years. This an option? Whenever we have made a larger purchase we have put a few hundred down then financed the rest with one of these cards for like $50/month.

 
Thanks. That's pretty much what I was going to do. Just wanted to make sure I wasn't a complete idiot.

do myself screw that. I've done 3 roofs in my life never again. That's one of those jobs even though I know how to do it I'll pay. Not worth the aggravation of doing it myself.

 
Why would you pay to borrow money that you already have?
Because cash flow is king. Because rates are ridiculously low. I can't think of a better time to use a bit of leverage.

So, basically, use cash if you hate money.

 
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Sand said:
gianmarco said:
Why would you pay to borrow money that you already have?
Because cash flow is king. Because rates are ridiculously low. I can't think of a better time to use a bit of leverage.

So, basically, use cash if you hate money.
He can have the cash if he needs it, that's the point. So unless his savings account is earning close to prime (lol), then it makes no sense.As someone pointed out, if he can get a credit card that won't charge interest for a period of time, then that's what I would do. But a HELOC is like cash in his pocket already.

So hypothetical, he has $100,000.

$50,000 HELOC

$50,000 savings.

Both are immediately accessible. Roof costs $50,000. Why would you use the $50,000 where you pay 4+% interest when you can use the $50,000 that you pay 0.1% interest (the loss of his likely savings account rate)?

If something later comes up that he needs $50,000, he can still pull it from the HELOC instantly.

 
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As long as you will replenish your savings then using it will not be a big deal. I found that most people can not or will not end up doing that and just burn out their savings where as your heloc is a bill that you will pay and it will be done with your savings still intact.

 
Sand said:
gianmarco said:
Why would you pay to borrow money that you already have?
Because cash flow is king. Because rates are ridiculously low. I can't think of a better time to use a bit of leverage.

So, basically, use cash if you hate money.
He can have the cash if he needs it, that's the point. So unless his savings account is earning close to prime (lol), then it makes no sense.As someone pointed out, if he can get a credit card that won't charge interest for a period of time, then that's what I would do. But a HELOC is like cash in his pocket already.

So hypothetical, he has $100,000.

$50,000 HELOC

$50,000 savings.

Both are immediately accessible. Roof costs $50,000. Why would you use the $50,000 where you pay 4+% interest when you can use the $50,000 that you pay 0.1% interest (the loss of his likely savings account rate)?

If something later comes up that he needs $50,000, he can still pull it from the HELOC instantly.
yep that's the reason I have the heloc. Backup needed cash. No real debt except sons college and mortgage.I did finance my heater ac furnace because it was 0 percent

 
Side note... But what's up with these roofers who say you can get it done with zero cash out of pocket by way of homeowners insurance? First I heard of it sounded shady, but some pretty reputable shops seem to do it around here.

 
Side note... But what's up with these roofers who say you can get it done with zero cash out of pocket by way of homeowners insurance? First I heard of it sounded shady, but some pretty reputable shops seem to do it around here.
Hail storms.

 
MC Gas Money said:
jon_mx said:
trogg78 said:
jon_mx said:
Do the work yourself.
He would still have to pay for the materials.
Probably costs about 1/3rd the costs.
Maybe he doesnt know how. Its his roof.....that is something you want a pro to fix
I can do a lot but when it comes to stuff like roofs etc, I dont get cute. I would do research and get the best possible roofer I can find. I have to get a new one next year and that is going to suck. The price range is pretty extreme.

How much are you looking at OP?

 
What are roofs going for these days?
In easten NC I had a quote of $16000 for a completely new roof. This is from a reputable guy in town who does solid work and warrantys everything. He says he can be in and out in a week if the weather is good.

I had a quote of $5000 for some minor work but that would just be patchwork and at some point I would still have to do a complete overall.

Oh and I have to replace a HVAC unit before next winter. Yeah me

 
What are roofs going for these days?
In easten NC I had a quote of $16000 for a completely new roof. This is from a reputable guy in town who does solid work and warrantys everything. He says he can be in and out in a week if the weather is good.I had a quote of $5000 for some minor work but that would just be patchwork and at some point I would still have to do a complete overall.

Oh and I have to replace a HVAC unit before next winter. Yeah me
. You re-roofing the Taj Mahal?

 
jon_mx said:
trogg78 said:
jon_mx said:
Do the work yourself.
He would still have to pay for the materials.
Probably costs about 1/3rd the costs.
If its just a layer on top of an existing layer, I'd definitely do myself as you already have the existing layer as a guide. Complete tear down, I'd probably contract out.
its going to be a tear off on my lower roof cuz I want to replace the flashing and the top roof is just going to be a layover
 
belljr said:
So I am in the market for a new roof. I have enough in savings to cover the cost but that would leave very little left.

Would you pay it that way or use a HELOC, which I already have at prime. The interest is tax deductible and pay it off over a year or 2.

Thoughts.
some advice might be to get a bigger cushion, sounds like you are running a bit tight

 
What are roofs going for these days?
In easten NC I had a quote of $16000 for a completely new roof. This is from a reputable guy in town who does solid work and warrantys everything. He says he can be in and out in a week if the weather is good.I had a quote of $5000 for some minor work but that would just be patchwork and at some point I would still have to do a complete overall.

Oh and I have to replace a HVAC unit before next winter. Yeah me
.You re-roofing the Taj Mahal?
how much should a 4000sq ft house with one side steep pitch cost?

 
What are roofs going for these days?
In easten NC I had a quote of $16000 for a completely new roof. This is from a reputable guy in town who does solid work and warrantys everything. He says he can be in and out in a week if the weather is good.I had a quote of $5000 for some minor work but that would just be patchwork and at some point I would still have to do a complete overall.

Oh and I have to replace a HVAC unit before next winter. Yeah me
.You re-roofing the Taj Mahal?
how much should a 4000sq ft house with one side steep pitch cost?
FBG Roof

 
belljr said:
So I am in the market for a new roof. I have enough in savings to cover the cost but that would leave very little left.

Would you pay it that way or use a HELOC, which I already have at prime. The interest is tax deductible and pay it off over a year or 2.

Thoughts.
some advice might be to get a bigger cushion, sounds like you are running a bit tight
Ok you pay my sons tuition this year. Tia.thanks for your concern. I have no outstanding bills. Paying college in cash has things tighter

 
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Typical comp shingle roof in Texas is around $180-$200/square installed. A square is 100 square feet.

 
Sand said:
gianmarco said:
Why would you pay to borrow money that you already have?
Because cash flow is king. Because rates are ridiculously low. I can't think of a better time to use a bit of leverage.

So, basically, use cash if you hate money.
He can have the cash if he needs it, that's the point. So unless his savings account is earning close to prime (lol), then it makes no sense.As someone pointed out, if he can get a credit card that won't charge interest for a period of time, then that's what I would do. But a HELOC is like cash in his pocket already.

So hypothetical, he has $100,000.

$50,000 HELOC

$50,000 savings.

Both are immediately accessible. Roof costs $50,000. Why would you use the $50,000 where you pay 4+% interest when you can use the $50,000 that you pay 0.1% interest (the loss of his likely savings account rate)?

If something later comes up that he needs $50,000, he can still pull it from the HELOC instantly.
Yes, because there is nothing out there that can do better than .1%.

 
Sand said:
gianmarco said:
Why would you pay to borrow money that you already have?
Because cash flow is king. Because rates are ridiculously low. I can't think of a better time to use a bit of leverage.

So, basically, use cash if you hate money.
He can have the cash if he needs it, that's the point. So unless his savings account is earning close to prime (lol), then it makes no sense.As someone pointed out, if he can get a credit card that won't charge interest for a period of time, then that's what I would do. But a HELOC is like cash in his pocket already.

So hypothetical, he has $100,000.

$50,000 HELOC

$50,000 savings.

Both are immediately accessible. Roof costs $50,000. Why would you use the $50,000 where you pay 4+% interest when you can use the $50,000 that you pay 0.1% interest (the loss of his likely savings account rate)?

If something later comes up that he needs $50,000, he can still pull it from the HELOC instantly.
Yes, because there is nothing out there that can do better than .1%.
That's a completely different story. Depending on how much and what he might need it for, keeping some money in a safe, low interest account makes sense.

If we are discussing whether he should be or should have been investing that money, that's a different story. But he clearly said savings account, implying it's in a low interest account. Use that money before paying someone else to borrow.

 
belljr said:
So I am in the market for a new roof. I have enough in savings to cover the cost but that would leave very little left.

Would you pay it that way or use a HELOC, which I already have at prime. The interest is tax deductible and pay it off over a year or 2.

Thoughts.
some advice might be to get a bigger cushion, sounds like you are running a bit tight
Ok you pay my sons tuition this year. Tia.thanks for your concern. I have no outstanding bills. Paying college in cash has things tighter
I get the impression you took that personally, but you shouldn't. There may be good reasons you had to draw down your usual emerg fund but the point remains, in the future (maybe post college) consider returning it to a higher point.

Short term, definitely pay out of pocket if you can swing it, you always have that credit line should you need it

 
No not personal. I have plenty of savings in various accounts but not liquid.. I have about 6 to 10 months currently and hate being below that which I would be.

 
Side note... But what's up with these roofers who say you can get it done with zero cash out of pocket by way of homeowners insurance? First I heard of it sounded shady, but some pretty reputable shops seem to do it around here.
Hail storms.
I didnt realize people paid for roofs out of pocket, at least in the midwest.
This.

Wait til the spring storms. First hail storm or windstorm, start calling roofing companies.

 
Um hail and wind damage isn't a common occurrence here.

not sure I remember the last time I saw hail

 
No not personal. I have plenty of savings in various accounts but not liquid.. I have about 6 to 10 months currently and hate being below that which I would be.
this is way different than you described above....now it makes even less sense to use the heloc....
 
No not personal. I have plenty of savings in various accounts but not liquid.. I have about 6 to 10 months currently and hate being below that which I would be.
this is way different than you described above....now it makes even less sense to use the heloc....
ya, I was trying to picture where someone would keep their non-retirement savings that was not liquid. Krugerrands?

 
Sorry plenty of retirement savings that are not liquid.

6 to 10 months regular savings would be used for the roof

 

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