Should we wipe out savings or go with home equity line of credit to finance home improvements?

Posted on Sep 12, 2012 in FHA Information

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Stated Income Loan – FHA Streamline Refinance

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Question by : FHA Mortgage withdrawal?
I have an FHA mortgage that I was not aware if I move the mortgage company will question me. The house was bought 2006, try due to family increase I needed more room, and this happened sept 2011. when I moved to a new rental place to accommodate my family, the mortgage company sent me a letter that am not supposed to move, or else they will enforce the FHA Rules and Regulations. I never changed my mortgage address, or my driver license address, but I asked my mails to be forwarded to my new address. I have a cousin now living in my FHA home and am helping him, but not paying rent or anything. My mortgage payments are upto date and no late payments. I intend to continue making my monthly payments promptly.
1. How did they find out I moved?
2. What can I do to get out of this mess?
3. Is it true after 10 years I have the right to sell the home?
4. I have 10 days left to sign and return a document that I still live that location, do I sign it and return it to mortgage company?

Best answer:

Answer by Cathi K
You probably gave the post office a change of address form. Mail went back to the mortgage company. The loan you have is for your home not for a rental (collecting rent or not). Most loans have a requirement that you must live in it for a certain period of time. If you sign the form saying you live there and you do not, you are signing under penalty of purgery.

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Question by boots: Should we wipe out savings or go with home equity line of credit to finance home improvements?
My husband and I are debating how to finance some home improvement projects. He says use savings, viagra I say use a line of credit(repay within two years hopefully) I am afraid if we use savings we will never replace it. He doesn’t want debt. Any opinions?

Best answer:

Answer by Joe C
Neither. Never use all of your savings or borrow money for a luxury expense.

Save up the extra money and pay cash.

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  1. ok your choice here is a simpel question go into debt or no if you have the money + $ 1000 for an emergency plan go with savings if not wait till you do have the money. or you take out the loan pay for the stuff you could of baught outright AND pay the bank for lending you money in other words you have 2 equations to choose from caust of improvments =caust of improvments or caust of improvments + intrest = loan

  2. Save up and pay cash. If you can’t pay cash for your home improvements, then you can’t afford it.

  3. Neither of you are totally right in my book.

    Without knowing your situation I can only speak in generalities, but this is what I do for a living.

    Lines of credit are cheap..RIGHT NOW.

    Savings are wonderful because we could crash and burn in this country..our largest banks are borrowing from Chinese, Middle East, European, and Japanese banks in record amounts to stay afloat, and some may become partially or totally foreign’s that bad.

    My suggestion, do a little of both..that way you’ll be the happiest with each other, too !!!

  4. If you got the equity then go with the HELOC. If the home improvements are going to increase the value of your home then it’s a no brainer. As long as you’re not going to buy a car or take a vacation with it. Leave your savings alone.

    …OR say you can get a HELOC @ 6% APR. Then the money in your savings account that you would have spent on your house – put that money in a CD (or some other investment vehicle) that earns 6% interest and then you’re pretty much getting your home improvements for free. If you got 6% going out then see if you can get at least 6% coming in…. and then you’ll make that much more when you sell the house because you didn’t really pay much for the improvements.