Remodel Going Over Budget
November 6, 2018 7:25 AM   Subscribe

A friend of mine's home remodel is going over budget. He had done a cash-out refi to fund the construction, but, now due to some cost overruns, he's getting a little short. What are some strategies for getting some more money to put towards the remodel?

~$20k. Bonus points if you can suggest ways that might involve being able to write off the interest. I was originally thinking of getting a home equity loan on top of his new mortgage because the house will be worth more when it is done. But, with it still being under construction would that make this course of action not feasible?
posted by trbrts to Work & Money (5 answers total) 2 users marked this as a favorite
I would assume he could still get a home equity loan or line of credit while the house is being remodeled. I'd also recommend a 12months no interest credit card. And to spend more time on planning the next big project. It's almost a given that a remodel construction project is going to go overbudget because you can't see behind walls and excitement about the 'new and best materials' goes overboard.
posted by The_Vegetables at 7:48 AM on November 6, 2018 [2 favorites]

Nothing to be lost in seeing if he qualifies and can get a HELOC to bring in to cover the shortfall. And, yes, a credit card could be helpful if the contractor will take a CC payment. You could also see about getting a personal loan from a bank or credit union.
posted by amanda at 7:54 AM on November 6, 2018

He may be able to borrow from his 401k; but this is pretty risky if things go wrong with your company/employment. I would NOT recommend this, but hey, it's an option.
posted by larthegreat at 8:23 AM on November 6, 2018

Lots of people use HELOCs in this kind of situation.
posted by Anticipation Of A New Lover's Arrival, The at 8:55 AM on November 6, 2018

It's also worth taking a *VERY* hard look at the current budget and designs, to see where a few sacrifices might be made. Sometimes simple things like handles/pulls, outlet designs and covers can make a pretty big difference in the budget. I'd also say that anything the homeowner can do themselves will help as well, provided the pros don't have to come in and do it over. Clean up, for example can be a way to save a few bucks.
I'd do the budget review before applying for a new loan/HELOC, so they are positive about what is needed.
posted by dbmcd at 9:06 AM on November 6, 2018 [4 favorites]

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