I need $50,000 for a kitchen remodel.

I can get a 401K loan 5 yr term 9.25 interest - total payments add up to 62,000 or so with a monthly payment of roughly $1,050. That payment is is tough on my current budget so I was considering a Home Equity Loan with a longer term.

I know there are a lot of Home Equity Products on the market. I found one from ING that is 8.25%, 25 year term, interest only for the first 10, no early payment penalty. I know it is a dangerous loan but has great flexibility. I could possibly pay $700 a month (more than the minimum interest only payment) making the budget less of a concern. The problem is I am paying ING the interest instead of myself with the 401k loan.

I am not concerned about losing my job. So I am not worried about being stuck with any 10% 401k penalties and additional tax.

So, the question is, what do I do? Should I do a blend part 401k loan and also take out a home equity loan?

Not sure, would love to have your thoughts.

Thanks.

Fr_Chuck

I would say you don't need a kitchen remodel, you want one and can't really afford one.

What about this, you put that 1000 dollars a month into a savings account for the next 4 years and then you decide if you want to spend that money in cash for the project.

I beleive that if you are going to push your budget, it is spending too much money.

I beleivev putting your home more at risk in losing it, is extremely dangerous.

CaptainForest

I agree with Fr Chuck’s plan of action.

I doubt you can really afford it right now. Save the money for the next 4 years and THEN get it.

Not only will you be able to afford it, but it will feel much better as well.