Whether you’re renovating for style or repair, making changes to your home is exciting –and daunting! Planning what to upgrade, where to purchase the supplies, who to trust to do the work are just some of the daunting tasks involved.
But there’s one other detail that needs to be figured out before anything else: how to finance the renovation.
The cost of renovation varies quite a bit, but generally speaking, we’re talking a few thousand.
As in most situations, saving for a big project is ideal, but it’s not always possible. You may be able to crowdsource some of the funding by asking your parents for help or possibly asking friends and family for cash gifts for your wedding or birthday. But it’s unlikely to be enough to finance your home makeover.
For a more sure way to get the money you need to repair or upgrade your home, consider these home loan options.
How To Fund Your Home Renovation
1. Refinance
This method is one of the most popular ways to fund many things, including home renovations. Similar to a savings, your home equity is a stash that you can tap into when it makes sense. What’s even better is that refinancing into another loan may also lower your monthly payment or otherwise save you money. There’s also more than one type of refi program. So depending on your credit and other qualifying factors, funding your project with a new home loan may not change your monthly payment at all!
The key here is that it “makes sense” for your loan and financial situation. To see if this is the right choice for you, please contact us.
2. Get a HELOC
If your interest is already low or maybe you’ve already paid off your loan and rather not refi, then consider a HELOC. A Home Equity Line of Credit is a way to access your equity without refinancing. Similar to a credit card, you “borrow” money against your home as needed. Unlike a regular credit card, the interest rates are much lower. One thing to note is that a HELOC is usually an adjustable-rate loan. However, fixed-rates HELOC’s are available, too.
Contact us to run a quick scenario on both so you can compare payments and rates.
3. Use a Home Equity Loan
Another home loan option that does not require refinancing is a Home Equity Loan. This type of loan requires you to take out the funds all at once, rather than “as needed” in a HELOC. The benefit of this loan is having a lump sum, which may be just what you need for your renovation. You’ll also get the stability of a fixed rate with this type of loan.
Confused as to which loan is best for you? We’re here to help! Contact us for an obligation-free consultation and get on your way to a home renovation at a cost you can afford.
