There might come a time when your safe haven, your heavenly abode might need some renovations here and there. There might be changes you need to make as soon as possible to improve your living condition. Renovations like these can be very expensive and enough to empty your pockets. Or, there might be moments when you need to get emergency renovations done but you do not have enough capital to get it done. In this article, we will work on helping you evaluate all your financing methods so you can get improvements done in no time as we recommend the most suitable mortgage options.
When should you look for other methods to finance your home improvements?
You can always save up money slowly and steadily for future renovations. This in fact is the best method to finance your home improvements. But there are times when your house might need emergency renovations and to get them done you would need emergency cash. You might not have enough money to fund such improvements but then they are important as well to maintain your living condition. But before you consider getting your renovation project financed you should consider calculating properly to make sure that you can save up enough to pay for the renovations in the future.
Home Renovation Financing Options
Here are a few financing options that you can choose to get your house renovated.
Home Remodelling loans
Home remodel loans are often given out by banks and other financing corporations. These loans are mostly unsecured loans that would mean you do not need to keep your house as collateral to receive the loan. The interest rates for these loans and your ability to qualify are determined by your credit score. The transfer of money when you apply for the loan is very swift as well. These types of loans are the best for small or mid-range renovations as the amount of loan money isn’t very high. Home remodel loans can have higher interest rates as they are unsecured and it is better to opt for other financing options rather than going for this one.
Home Equity Loans
Home Equity Loans work as a second mortgage. These are secured loans that take your house as collateral and pay you according to that. Home Equity Loans are easier to pay and you can receive the whole amount of the money that you would need for your renovation project. Home Equity Loans have fixed payments that you would need to pay in a planned manner until the whole amount has been paid back. HELs are suitable for you if you have already planned out and know how much money you are going to need for your renovation project. Home Equity Loans do not give you the flexibility to pay whenever you want.
Home Equity Lines Of Credit
Home Equity Lines Of Credit is one of the most famous methods of financing home improvements. Home Equity Lines Of Credit Loan is a secured loan, which would mean that the interest rates are much lower when compared to personal loans because of HELOCs being secured. This loan allows you to take as much money as you need for as long as you need until your project has finished making it ideal for long-term renovation projects. HELOC has a condition that you would need to fulfill before you are allowed to take a loan against your home. Your home would need to have 15 % to 20 % equities.
Loans provided by the Government
Government-funded loans are the best options out there for anyone. As you can get the loan without any insurance and might not have to pay interest either. Government Loans can provide you up to $25,000 but you would need to make sure that the money is only used for improving the living condition of your house as some form of renovations might not qualify for the loan. You do not require your property to have any equity either meaning you will qualify for the loan easily.
Using a Credit Card
Using a credit card is the best option if you are getting minor renovations done in your house. Renovations like getting the kitchen cabinets fixed, or installing a new door can easily be paid off using a credit card. You do need to make sure that you use a new card as they have a lot of introductory offers which don’t require you to pay interest. Some credit card companies also offer credit points that work as cashback which can be used by you for other purchases. That would mean the more renovations you are getting done the more money you save. It is not wise at all to use your credit card for bigger home improvement projects though as you might not be able to pay back the money in time until the offer for your new card lasts. Also do not use an old card because the interest rate might end up being more than other loan options.
Do make sure that you are calculating the ins and outs of financing your new renovation project before you get down with the work. We hope this article will help you to explore all the methods you could use to renovate your house and make it look just the way you want.