It’s time to breathe new life into your old home and make it into the showpiece it deserves to be. Whether it’s outdated décor, outdated fixtures, or outdated technology, your home deserves a complete overhaul to bring you in line with modern standards and expectations.
That being said, you can always renovate your home on a tight budget, but if you want to get it done right, you have to find ways to finance your project outside of utilizing your homeowners insurance or home warranty plan. Filling in all the necessary financing details can be tricky, but, don’t worry, we’ve got you covered.
Here’s a Comprehensive Look at Four Ways to Finance a Home Renovation!
Save For The Renovation
The most convenient way to go about renovating your home is to pay upfront in cash.
Even though this involves saving a large amount of cash for a possibly long period of time it is one of the safest financial options.
If you are paying with cash, you can always break your payments into stages of the project in order stay within your budget.
The benefit of paying for your home renovations from your savings is that you are free of any credit interest you would have paid or monthly payments you would have made if you made use of a credit facility.
Home Equity Loans
Another financing option for the home renovation is getting a home equity loan. A home equity loan is a second mortgage home loan that you can take on your home up to 85% on the equity of your house.
The advantage of a home equity loan is that you receive the money in a lump sum, making it easy for you to carry out major home renovations.
There are other types of mortgages such as conventional fixed rate mortgages. As the name implies, the rates will remain the same throughout the life of the loan. This one is perfect for homebuyers who are looking for long term home plans and stability. You can check out Space Coast fixed rate mortgage for more details.
A drawback to a home equity loan is that it adds to your list of monthly payments, and if you are unable to pay it back, your home will be foreclosed.
If you are looking to make some minor upgrades in your home for example fixing your porch or upgrading a couple of bathrooms the best financing option to take is with your credit card.
Credit cards are a hack when it comes to home renovation as some credit cards offer the first few months of use interest-free. This means that you can finance your project without having to pay anything extra.
Also, a lot of credit card providers now offer cashback percentages on your purchases, so you end up earning some money based on how much you spend on the renovation.
While using credit cards, you have to ensure you pay back on time and when due to avoid the high-interest rates that a lot of credit cards have after default.
If you meet certain requirements, you can qualify for the friendly termed government loans to finance your home renovation.
An example of a government loan is the property improvement loan that offers you up to $25,000 without having to rely on home equity. This works perfectly for individuals who recently purchased a home and are trying to get some remodeling done.
However it’s important to note that the loan is restricted to only renovation that improves the livability of your new home, and it might not allow you to carry out some upgrades.
The drawback to this is that not everyone can qualify for a government loan, but those who qualify get to save money on interest and loan insurance costs.
Deciding what financial option to go with when renovating your home can be difficult so it is advisable to consult your financial advisor before embarking on this kind of project.