Our bathrooms and kitchens are dated, and it appears that we will need to do some updates in order to sell the home. We're actually fine with the way the house is, but it would probably be a good investment to update the kitchen, floors and baths for re-sale. When we first moved to the house (in the 90's), we put a new kitchen counter in, tiled floors, and painted the existing wood kitchen cabinets white. Now, it looks like we may have to do more extensive renovations. So, what would be the best way to finance these improvements:
1. Take out a home equity loan for 5 years (current rate = 4%)
2. Take out a loan from 401K (current rate = 5%)
3. Withdraw funds from Roth or IRA (spouse is 61 y/o so no penalties) (last year's return on investments was around 9%)
It seems to me that going for the home equity loan would be the best idea. However, I loathe the idea of being in debt and am almost tempted to withdraw funds from roth or ira, but the opportunity cost would be too great (maybe, we're mostly invested in a target fund with underlying index funds.) On the other hand, we both took a cut in pay recently and it would be tight to have that monthly bill for the home equity loan. Any thoughts or other ideas? What would you do? Thanks!