[USER]

The cost to replace our roof is being quoted from $ 15k- 30k. We are yet to do pros and cons on what company we will be going with. The Financing option for the companies we talked to are offering APR of 10- 10.99%. Our credit score is 790.

Is there hack of managing this expense without paying interest that I am not aware of? We are first time home owner. This will be our first big repair/renovation expense. Making sure I am not missing anything.

We were looking to get loan from bank if we get a cheaper APR. We don’t have cash in hand. Everything is tied up in 401k, investments and emergency funds.

TIA.

[Don]

So sounds like roof isn’t an emergency so you save up to replace it. No borrowing or you will pay interest.

[Bhavesh]

1.) the 0% credit card as others have mentioned: gives you rewards and many months to pay it off. Leave your existing cash in treasury bonds in the mean time to collect 5% and make payments until that 0% runs out.

2.) a HELOC

3.) a 401k loan – yes you pay interest, but it’s to yourself. Better than paying interest to a bank

4.) sell the house for a better performing asset?

I am (kind of) going through this myself. What I’m noticing is that it pretty much needs to get paid with your money in the end. My insurance company did an inspection and threatened to cancel the policy (in a 3 week time frame) unless I did the roof, driveway, and lawn clean up. So I liquidated luxury/recreational assets (sold a dirt bike/wheels), picked up shifts and working 6 days a week for 2 months (trading time for money), and using cash reserves.

I figured no two situations are the same, so you have to figure out how to move money around in your own net worth to pay for it. These are hard times with high home prices and high interest rates, so now’s the time to flex that W2 and work extra shifts, pickup a 2nd job, or do a side hustle for extra cash every month to pay down that loan sooner.

Maybe pay some out of your emergency funds, take a small 401k loan, and side hustle for the rest.

In the end, look at the bigger picture and trust that whatever you spend now will pay off later as the house appreciates.

[Carole]

If there has been storms lately have insurance company come out to assess. We were able to go through insurance (minus deductible) after a hail storm. Granted our roof was 5 years old and was damaged after hail, but you never know.

[Sean]

Emergency fund is exactly for this and should be in cash equivalents of some form.
And yes unfortunately the hack is to have money put aside for known but unpredictable expenses such as this.

If you own a home you need higher amount in savings for upkeep and repairs.

[Author]

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