Financing your swimming pool

[GTakacs]

Naa.. With PMI you just request it to be canceled once the value of the home or the equity or a combination of both make it where you've reached 80% LTV. You don't have to refinance the loan in order to get it canceled.

Unless you have an FHA loan, in that case you're screwed and can't cancel it like that.

BTW The low 3rd mortgage interest is what caused me to go with a pool builder instead of DIY. I was ready to build it myself but interest rates for self builders are sky high and wasn't worth it.

[PhantomAndy]

Obviously it's always best to try to save until you can afford to purchase the pool outright.

However, if you are going to finance it, do it as a home equity loan. This will allow you to deduct the interest that you pay on the loan from your taxable income, saving you money on your taxes. You won't be able to write off the interest on the financing with a finance company like GE Capital (Double check this with your tax advisor, I could be wrong).

We took out a home equity credit line to do our pool, but the processing was slow, and we started the process a little late. We ended up paying cash for our pool since we had enough (barely) to cover the payments as they came due. The home equity credit line was never used and closed a year later when we locked into a 5% 15 year fixed mortgage.

Good luck

[Trish29]

Unless you have an FHA loan, in that case you're screwed and can't cancel it like that.

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I have a conventional loan which I can request cancellation. I just don't know if they'll agree that all the improvements ie, fence, deck and brick walkway on the side house PLUS the pool will be enough along with the 5 percent I put down last year along with any value added appreciation will be enough to cancel it. We shall see. My mortgager is Chase.

[Trish29]

The home equity credit line was never used and closed a year later when we locked into a 5% 15 year fixed mortgage.
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wow.. that's a good fixed rate lock. The best one I've found so far is with Navy Federal and it's lock is at 6.5%.. all other's are higher percentages. But I like this alternative. I think I'm clearer now on what direction to take. I'm seeing about getting the PMI off the first mortgage then applying for this HELOC through Navy Fed. Deduct the interest on it come tax time. Seems like a plan.

[PhantomAndy]

Yes - 5% fixed was a great deal. I have a friend in the banking business, not that I got a better rate, but he called me when the rates hit 5% about 1 1/2 years ago, and we moved quickly to get that deal. Total savings for us if we keep the loan to term will be about $150,000 over our previous loan that was 30yrs @ 6.25%.

That was our 3rd refinance since buying the house in 1997 (started on a 30 @ 8.125%).

Rates are on the rise now - our current home equity credit line is at 6.75% so I suspect that the typical fixed rate loans are in a similar range for most buyers.

Good luck with your project - you will enjoy your pool no mater what option you choose to go with.

[Trish29]

Thanks PhantomAndy...

*sigh*.. recalling the days when I had a 4.25% heloc.. those were the days......

[Sardian]

My line of thought is that if you can't pay cash for a pool then you shouldn't buy one. But that is just me. Even with a good rate and financed for only 5 years, you will be paying the bank at least $5,000 in interest on a $25,000 loan.

I would suggest cutting back on other things and save up for a couple of years and pay cash. You'll be surprised at how hard it is to let go of the money when you have it in cash.....I saved up $30,000 for a car once and decided I didn't really want the car that bad once I had the cash in hand.

Just my thoughts,

Russell