Current homeowner here, I've only been in the place a couple years so the house doesn't have too much equity in it yet, and I have a couple costly repairs that need to be done with the house (replace garage floor, new water heater, maybe roof) so i'm trying to get my ducks in a row and see which are the better options for paying for these repairs.
My rough understanding of the difference between HELOC vs home equity loan is HELOC is a line of credit that is scalable if you're unsure of the total cost of how much the repair is vs the loan which is a more fixed amount per month for payments, with both being based on the equity of the home.
I'm unsure of what the total equity is for the property, how do the companies figure out what that number is for those of you who have been through the process? Assuming there is some positive equity (not too much I'm already aware), if you have been in my shoes or imagine this scenario, which sounds better?
I'm currently a federal employee who is vested in a TSP fund, which also lets you borrow money. I'm aware of the disadvantages of taking away that $$ for retirement. Thankfully, I'm on the younger side (early 30s) and have been putting $$ in for some years now. Current balance is ~$37,000. I'm pretty positive my current home equity wouldn't be that much, so if i opted to go that route I'd still have time in service prior to retire (unsure if I'll stay with fed employment in the future) to recoup some of the money loaned out.
For some rough numbers for rates, currently my primary credit union (Navy Fed) has the following available:
Fixed equity: 7.4 %
HELOC: 8. something percent
Personal Loan: 8.99%
TSP Loan. 4.0 %.
Current #'s (debt, credit score, etc)
Mortgage: $145,000 2.49% $1,200/month with escrow
Auto: ~$9,000 1.49% $300/month
CC: ~$7,500 18.49% ~$500/month
No student loans.
760 Credit Score
Income - $65,000
Looking for some input about which would be the better course to take from anyone that's been through similar. Thanks
original posted by NLee1776 to r/personalfinance on Wed, 28 Feb 2024 22:49:19 GMT.