We make about $175,000 a year and have no real debt, other than the house. Unfortunately, we do not have many deductions other than two children and filing as married filing jointly.
-- James Jumpin'
Your kids are only young once, right?
View today's lowest mortgage rates
If you've decided that you want to have a pool, then why have them sit out a season while you save for it? If you can get the pool installed and have it running this season, that's what I'd recommend.
By your estimate, you can save the money over a year's time, so you can pay off the loan with only a year's interest expense. If pool prices rise by more than the interest expense over the following year, you've lost both a season in the pool and the savings.
The decision on how to finance the pool depends on the interest rate on your existing mortgage, the equity in your home and how long you plan to be in the house. A cash-out refinancing makes sense if it reduces the interest rate on your existing mortgage but carries higher closing costs than a home equity loan or line of credit.
With a plan to repay the obligation quickly, you might be better off with one of the loans. Make sure you understand any prepayment penalties connected to the home equity line or loan.
If the mortgage interest deduction just replaces the standard deduction on your taxes, then it's not really helping you on tax savings. Jump in and enjoy!
Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.
Ask the adviser
To ask a question of Dr. Don, go to the "Ask the Experts" page and select one of these topics: "Financing a home," "Saving & Investing" or "Money." Read more Dr. Don columns for additional personal finance advice.